Tomahawk, WI 12/04/2013 (BasicsMedia) – It is close to impossible to get a company that attributes its profitability simply on a single product. Often, profitability depends on a number of different factors that work seamlessly together to turn a previous loss making company into a profit-making entity. When Micron Technology, Inc. (NASDAQ:MU) published its fourth quarter of 2013 financial results, it was clear that the company had posted profits. This was quite impressive bearing in mind that not many tech firms had reported similar results during the same period. How did MU manage this?

MU Moves from Losses in 2012 to Profits in 2013

Last year, during the same period, Micron Technology, Inc. (NASDAQ:MU) reported a loss of around $243 million, compared to his year’s profits of $1.71 billion. The company mostly says that it owes the profits to the improved prices for memory chips. Last year, memory chip prices were very bad, and this was the single most cited factor that led to the losses. A year later, the prices of memory chips had improved quite substantially to a point where the company saw its profits rise exponentially to levels that not even the most optimistic investor or Wall Street analyst would have imagined or predicted.

Micron’s two main products include DRAM and NAND, and the both of them have experienced mixed price trends in 2013. Whereas DRAM prices have improved and risen to new levels during the fourth quarter of 2013, on the other hand, NAND has posted a drop in its prices during the same period. When moving into the new fiscal year, the company expects the growth in DRAM prices not to go beyond a single percentage point. Micron Technology, Inc. (NASDAQ:MU) says that it also expects the prices for its NAND products to drop by a single percentage point in the first quarter of the new year.

MU Owes its Profits to Increased Prices for Memory Chips

If the memory chip prices had stayed at similar levels to those of last year, it is doubtable whether the company would be enjoying such a stellar performance in 2013. However, despite the impressive financial results it posted during this quarter, the company still managed to perform in a way that was below expectations. It is true and commendable that Micron Technology, Inc. (NASDAQ:MU) saw its profits rise from what it posted last year, but this was not enough to meet Wall Street expectations. It needed to implement further actions to enjoy a balanced outlook this year.

One of the biggest complaints most of Wall Street often levies against Micron Technology, Inc. (NASDAQ:MU) is that it has thus far been unable to reduce its costs effectively. Micron needs to look for creative ways in which it will reduce its costs massively, instead of leaving them at the current levels. Cost cutting measures are not limited to MU alone, since a number of its peers in the industry are doing similar exercises with the intention of boosting their financial position going into the next fiscal year. This is the best way in which MU will enjoy long-term profits growth.

Regardless of what Wall Street analysts might say, the truth is that Micron Technology, Inc. (NASDAQ:MU) enjoyed a great 2013, but it could have been greater with more prudence exercised where costs are concerned.

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