You don't know a tough market if you haven't seen the computer memory sector lately.
Memory maker Micron Technology (NYSE: MU ) reported improved results last night, prompting COO Mark Durcan to expound on the period's virtues. "Micron continues to execute strongly on its cost reductions," he said, "resulting in a positive gross margin in the third quarter."
That's right -- a positive gross margin is noteworthy for Micron these days. Forget about net or operating profits, dude. The company posted a $0.30 net loss per share on sales of $1.5 billion. But in the end, that's OK -- Micron came up with $217 million in operating cash flow, after all. Not enough to keep up with $577 million in capital expenditures, because it's expensive to keep the improvements going on the manufacturing lines. Still, there's about $1.6 billion left in Micron's coffers, so the company can ride this storm for another few quarters before taking any drastic measures.
The company grew sales by 16% over last year's third quarter and 10% over Q2 2008. A 10% sequential increase in DRAM sales was offset by a 5% price decline. In the flash segment, the story was similar, but on a different scale: 20% sequential price drops balanced against a 40% unit increase.
And according to Michael Sadler (Company VP of Worldwide Sales), that's the prelude to a new era of supply-and-demand balance. "From our perspective, exiting fiscal Q3 of this year we are seeing an improved supply demand balance," he said. The DRAM pricing trend looks particularly promising, and the memory market as a whole might get back to fairly stable prices in the near future. Maybe then, Micron and rivals like SanDisk (Nasdaq: SNDK ) , Qimonda (NYSE: QI ) , and Spansion (Nasdaq: SPSN ) can get back to making money again.