Technology stock was higher after the memory chip company posted financial results for its fiscal second quarter ended March 2 that were about in line with expectations, as a weak market for PCs and smartphones continued to weigh on the company’s results. Micron also said that as part of its cost-reduction program, it will reduce staff by about 15%—up from a previous plan to cut heads by 10%.
But there are some promising signs for the memory chip maker.
Sumit Sadana, Micron’s chief business officer, noted in an interview with Barron’s that high customer inventories, which have been weighing heavily on the company’s results, are showing signs of improvement. He says there has been “a lot of progress” on inventory reductions at PC vendors, and improvement as well on inventories held by smartphone producers.
He says there is “still more wood to chop” on inventories at data center computing companies, but that inventory conditions there should be healthier by the end of the calendar year. “It was a tough quarter, but we are seeing good, positive signs for the future,” he said.
Micron was up 5.8% to $62.71 on Wednesday, at $60.85.
For the quarter, Micron (ticker: MU) reported revenue of $3.69 billion, about in line with the Street consensus at $3.7 billion. Revenue was down 53% from a year ago, and 10% from the fiscal first quarter.
On an adjusted basis, the company lost $1.91 in the quarter, worse than both the company’s forecast for a loss of 62 cents, and the Street consensus forecast for a loss of 86 cents. Micron said it took an inventory write-down in the quarter of $1.34 billion, or $1.34 a share.
Under generally accepted accounting principles, the company lost $2.12 a share. Using adjusted Ebitda, or earnings before interest, taxes, depreciation, and amortization, the company lost $1.81 billion. Micron ended the quarter with $12.1 billion in cash and marketable securities.
Despite the ugly results, the company struck an upbeat tone in its press release and conference call…