According to memory-chip giant Micron Technology
That's the takeaway from Micron's fourth-quarter report on Thursday night: $2.1 billion of revenue was in line with analyst expectations, but the non-GAAP net loss of $0.14 per share was not. Micron was supposed to make money.
As you might imagine, the profit-buster lurked in Micron's margins. Last quarter's 22% gross margins dropped to 15% as prices on PC-bound DRAM memory chips fell through the floor. Other chip slingers are cutting back their DRAM production, but Micron has no such market-improving plans. The way Appleton spins it, the price changes are driven by a lack of demand rather than oversupply.
Well, baloney. I say tomato, you say tomahto -- supply is outstripping demand in this sub-market any way you twist it, and that's terrible news when DRAM is your biggest division by revenue.
So in the end, shareholders in consumer-friendly PC players including Microsoft, Dell
Micron is currently weighing on my CAPS score and real-world portfolio returns like a steel anchor around my neck. I picked a terrible time to start both positions. However, Micron is fundamentally strong and can muddle through tough markets like this one for years on end. My CAPS positions in Hewlett-Packard
Start your own CAPS position on Micron. You're getting a much nicer starting price than my $9.24 per share, you lucky duck.