More Red Ink for Micron

Micron Technology’s results after the bell on Wednesday did nothing to give hope that the company will return to profitability any time soon.

With only 5 quarters of profitability in the last six years, Micron, more than any other big technology company, has been battered by pricing pressures coming out of Asia.

The company lost $215 million, but sales of $732.7 million beat estimates, raising a glimmer of hope. Micron stock lost 2.4% in Thursday trading.

UBS Warburg mustered up enough enthusiasm to raise its rating on Micron from Reduce to Neutral.

“While we believe that the near-term upward pricing trends and relative undersupply through the end of the year will act as a buffer to the stock, we are hard-pressed to recommend this stock based on our revenue and earnings projections that result in losses for the coming five quarters and do not result in positive earnings per share until the November quarter of fiscal year 2005,” UBS wrote.

Standard & Poor’s revised its outlook on Micron to Negative from Stable, reflecting continued pricing pressures and weak demand levels, Reuters reported.

Micron has closed the product gap after lagging Samsung in its transition to double data rate (DDR) memory from the formerly dominant synchronous DRAM (SDRAM) technology, the rating agency said, which has led to some recovery in market share.

But continued weak operating profitability and negative cash flows could lead to a further deterioration in liquidity in the next few quarters, despite the company’s good competitive position and technology base, S&P said.

Micron’s problems have gotten so bad that the U.S. government intervened this week.

Dow Jones reported that the Commerce Department on Tuesday imposed an import duty of more than 44% on South Korean memory chip maker Hynix Semiconductor to offset alleged subsidies by the South Korean government.

That kind of government action is usually reserved for the steel industry.

The broader market fell sharply Thursday on a weaker than expected Philadelphia manufacturing report, raising expectations that the Federal Reserve could cut interest rates by 50 basis points when it meets next week.

The Nasdaq plunged 28 to 1648, the S&P 500 dropped 15 to 994, and the Dow fell 114 to 9179. Volume rose to 1.51 billion shares on the NYSE, but declined to 1.95 billion on the Nasdaq. Decliners led 21-10 on the NYSE, and 20-10 on the Nasdaq. Downside volume was 75% on the NYSE, and 74% on the Nasdaq. New highs-new lows were 170-5 on the NYSE, and 166-4 on the Nasdaq.

After the close, Solectron and Tibco missed earnings estimates, and Cognos warned.

During the day, USA Interactive announced a new name – InterActiveCorp – and ticker symbol – IACI – effective June 23.

JD Edwards slipped 0.5% as PeopleSoft moved to acquire the firm. PeopleSoft lost 1.8%.

J2 Global soared 12% after raising prices.

RF Micro rose 2.7% on optimistic company comments.

Concur surged 5.5% on a new corporate compliance solution.

Jabil lost 2.4% despite beating estimates and reaffirming guidance.

Lucent slipped 1% despite winning a $100 million contract.

Qwest edged higher on a Web hosting push.

Openwave fell 6% on layoffs.

And the quote of the day: Sun CEO Scott McNealy called takeover rumors “nonsense,” saying the only company that has enough cash to acquire Sun is “a condemned monopoly.”

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