Micron Technology Inc. lost money for a seventh straight quarter. But don't let that fool you.

The $286 million loss in the quarter ending Feb. 28 brings Micron's seven-quarter losses to $1.7 billion. But its quarterly operating loss - what it lost just on sales, not including unusual, mostly one-time costs - was only $23 million, down from $204 million a year ago.

"It's a quarter that showed an improving set of market conditions," said Mark Adams, Micron president. "The operation performance is heading toward our path of profitability."

Revenue from dynamic random access memory chips, used in personal computers and cellphones, was up 24 percent because of increasing sales. Sales of flash memory, which holds information such as photos in cellphones, rose 9 percent.

Analysts agree with Micron's optimism.

Micron Technology Inc. is poised to increase its memory-chip producing capacity by 90 percent soon, said Mike Howard, a semiconductor analyst with IHS iSuppli and a former Micron employee.

Expansion is expected to come without an increase in the worldwide chip market's size, which means Micron would benefit if prices hold. That's because Micron is expected to close in the coming months on its purchase of Japanese chipmaker Elpida Memory Inc., a competitor.

"There is going to be a lot of money in there," Howard said.

Building on partnerships with Intel and Inotera, a Taiwanese chipmaker, the Elpida purchase could significantly increase the company's footprint. Even more important, expansion could open Micron to business it has not received before, Howard said.

When markets get tough, the smaller providers are often the first ones that chip buyers dump. But if Micron, as expected, ends up with 22 percent of the total memory market through the Elpida purchase, the company will be better positioned to become the first-choice supplier for large buyers, Howard said.

"There is no doubt that fundamentals in the business are changing," Doug Freedman, an analyst at RBC Capital Markets in San Francisco, told Bloomberg News. He has an outperform rating on Micron shares.

Micron's stock climbed from $5.17 on Oct. 24 to $9.69 March 14. It closed at $9.07 on Thursday but rose to $9.39 by 6 p.m. in after-hours trading. Micron reported its earnings after markets closed for the day.

Bill Roberts: 377-6408, Twitter: IDS_BillRoberts