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.
Fool contributor Anders Bylund owns shares of Micron but holds no other position in any of the companies discussed here. The Motley Fool owns shares of Microsoft and Western Digital. Motley Fool newsletter services have recommended buying shares of Microsoft and Dell and creating a bull call spread position in Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. You can check out Anders' holdings and a concise bio, follow him on Twitter or Google+, or peruse our Foolish disclosure policy.