Updated from 6:04 p.m. EST
It comes as no surprise that
, which has wallowed in red ink for two years, should post a whopping loss. If it weren't bad enough that DRAM prices dropped sharply in the latest quarter, the company also has had to shell out to cover the costs of a recent layoff.
But investors shrugged off the news on the bottom line and rewarded Micron for an upside revenue surprise. In after hours trading, shares rose 70 cents or nearly 9%, to $8.70.
In the quarter ending in February, the company lost $619 million, or $1.02 per share.
Micron did not provide a separate pro forma number, but Wall Street had been expecting a loss of 46 cents per share. The chipmaker lost 4 cents a share on $646 million in revenue in the year-ago quarter.
The company also followed its practice of declining to give guidance. The company argues tht DRAM pricing is too volatile to forecast revenues with accuracy.
The loss reflects a charge of $197 million for inventories and a restructuring charge of $116 million. In February, Micron laid off 10% of its staff, or close to 1900 employees.
Micron posted sales of $785 million, compared to expectations of $691 million.
"People were expecting this to be disastrous, looking at pricing and DDR. But the fact that they were able to raise revenue in light of ASPs falling so hard is probably incrementally better
than before," said Eric Ross, an analyst at Investec. "This is relatively good news, just not really great news."
On the conference call, CEO Steve Appleton said market prices for DRAM had dropped "precipitously" within the quarter, with the price of a 256 megabit DDR chip sliced in half. But since March, prices have begun to stabilize, moving off their February lows. "We're encouraged by the strengthening demand environment," he said.
Executives also claimed the company took share in the latter part of the quarter, though they couldn't identify which rival lost share.