Micron (Nasdaq:MU) Crushed on Chip Prices, Margins

Micron (Nasdaq:MU) recorded a dismal quarter, not on sales, but on the need to lower prices, and ultimately margins, to sell their computer memory chips.

So while revenue soared to $2.25 billion, an increase of 29 percent over last year's $1.74 billion, earnings were down to 15 cents a share, whereas analysts had been looking for 28 cents a share.

Earnings came to $155 million, $49 million less than the $204 million generated in the same quarter last year.

DRAM chip sales fell 19 percent sequentially during the quarter on a plunge of 23 percent in the price they sold for. They're expected to fall in price 25 percent in the current quarter.

NAND chips will also continue to fall, although the company said chips used in tablets, smartphones and solid-state hard drives are expected to grow in demand.

Chief Executive Officer Steve Appleton said, "There are some pretty bright spots, (solid-state hard drives) in particular for us have gone well ... Smartphones are holding up,"

Micron closed Wednesday at $8.28, up $0.14, or 1.72 percent.