Micron Technology, the largest U.S. maker of computer memory chips, on Wednesday posted a wider quarterly loss as revenue fell and costs rose amid a persistent slump in memory chip prices.
A glut of NAND memory chips -- widely used in cell phones, digital cameras and music players -- has been a drag over the past year on all makers of such chips, including Hynix Semiconductor and Samsung Electronics .
"Clearly we would like the pricing environment to be better," Micron Chief Executive Steve Appleton said on a conference call to discuss results with analysts.
At the same time, Micron cut the cost of goods sold per megabit in its fiscal second quarter by about 15 percent for DRAM chips, which are ubiquitous in computers, and by about 25 percent for NAND memory chips.
"We had indicated we thought we could achieve those (reductions) at the last call and we did," Appleton said. "We feel like the execution on the operation was pretty good."
Daniel Berenbaum, an analyst at Caris & Co was encouraged by the cost cuts. "The cost reductions were definitely better than I expected," he said. "Absolutely that's good news for them."
The company did not give a financial forecast for the current third quarter.
Weighing on its second-quarter results was a $463 million goodwill write-off tied to its memory segment. Net loss in its second quarter ended Feb. 28 was $777 million, or $1.01 a share, compared with a year-ago net loss of $52 million, or 7 cents a share.
Revenue fell to $1.36 billion from $1.43 billion. Analysts were expecting revenue of $1.41 billion, according to analysts polled by Reuters Estimates.
Average selling prices (ASPs) for its DRAM chips fell 15 percent in the second quarter from the prior period.
"They're doing what they can control and they're executing," said Hans Mosesmann, an analyst at Raymond James & Associates. "The NAND issue is everybody's problem."
Mike Sadler, head of sales for Micron, said that, at least in DRAM chips, "the market is relatively balanced right now. That's evidenced by the flat pricing environment in the last couple of months."
Sadler added the Boise, Idaho-based company was successful in passing on a price increase to customers in either late January or early February. He did not quantify the amount of the increase.
ASPs for NAND chips tumbled 30 percent over the same period.
"That's a pretty tough number to outrun in a given quarter," Appleton said.
In extended trading after the earnings report, Micron shares bounced above and below their closing price of $6.39 on the New York Stock Exchange, then settled 1.7 percent higher, at $6.50 after hours. The shares gained 39 cents, or 6.5 percent, in the regular session.