Two analysts chopped their estimates on memory chipmaker

Micron

(MU) - Get Report

today, citing lackluster demand for the chips in PCs and rising inventories.

But the stock was largely unmoved, closing up 0.3%, while the Philadelphia Stock Exchange Semiconductor Index was down 0.9%. In after-hours trading, Micron was down 0.08%.

Shortly before the market closed, Lehman Brothers' Dan Niles slashed earnings projections for the company sharply below consensus estimates. He cut May quarter estimates from 15 cents to break-even, while axing fiscal year 2002 numbers from earnings of a penny per share to a loss of 43 cents, and 2003 estimates from $2.25 to $1.60. Lehman Brothers hasn't done any underwriting for the company.

Those estimates are dramatically lower than consensus earnings estimates of 9 cents for the May quarter; a loss of 21 cents for 2002; and full-year earnings of $1.89 for 2003, according to Thomson Financial/First Call.

Honing in on weak demand for the memory chips known as DRAM, Niles noted that the average amount of memory per desktop and portable systems increased at a crawl between March and April. That isn't likely to change until new product launches debut for the back-to-school season around late July, he said.

Also, inventories of DRAM chips grew sharply this quarter to 5-7 weeks' worth, up from 2-4 weeks' worth of inventory exiting the previous quarter.

In a related bearish trend for chips, Niles said he believed retail PC inventories had surged from about one month at the end of last quarter to two months at the close of this quarter.

Earlier in the day, citing concerns about weak PC demand, Morgan Stanley cut revenue estimates for Micron's May quarterly revenues by 9% to $885 million, also well below the consensus estimate of $1.03 billion.

It also chopped its earnings estimate for 2002 from 2 cents a share to a loss of 31 cents, and for full-year earnings from $1.50 in 2003 to $1.35.

Morgan Stanley hasn't done any recent investment banking for the company.

Micron is scheduled to report earnings for the just-ended quarter during the week of June 24.