If you wonder about the value of Micron Technology Inc.s purchase of Japanese semiconductor producer Elpida Memory Inc, look no further than the Boise companys latest earnings report.
Tucked among the sales and cash-flow numbers is Microns report on its once-sagging wireless group, which has tried since 2010 to make a big splash in the mobile-device market.
After losing money for nearly four years, Microns wireless group reported an operating profit of $176 million in its latest quarter, which ended Nov. 28.
A major reason: Micron bought Elpidas mobile memory technology, which gave it a better product to sell.
We were not doing well on our own, said Mark Adams, Micron president. It enabled us to grow the business.
Mobile technology was a chief reason Micron bought the company in a deal that closed last summer.
Between the purchase of Elpida and joint ventures Micron has with other companies, the company has increased its manufacturing capacity by 90 percent without increasing the overall market. In theory that should keep pricing relatively stable, Adams said.
Micron reported revenues up 120 percent from the same, pre-Elpida quarter in 2013 and 42 percent from the previous quarter. Thats a healthy jump, said Mike Howard, a semiconductor analysts for IHS iSuppli and a former Micron employee.
The company reported a $1.71 billion profit in its fourth quarter, but much of that was tied to one-time accounting procedures as Micron took control of Elpida.
Earnings fell short of analysts expectations. Analysts on average had projected earnings of 44 cents a share, according to the Thomson Financial Network data published by Yahoo! Finance. But Microns stock price rose anyway in after-hours trading Tuesday, to $23.32 at 5:30 p.m. Shares closed at $21.73, up $1.06, in regular trading.
Increases were driven by a 69 percent jump in sales of dynamic random access memory, one of Microns basic chips, and an 8 percent increase in revenues from NAND flash memory, resulting from an 11 percent increase in sales volume.
Micron was the second-biggest gainer in the Standard & Poors 500 index in 2013. After buying Elpida, Micron announced a 5 percent reduction in its 30,000-employee worldwide workforce. The cuts included more than 350 Boise employees, according to the Idaho Department of Labor.
Bill Roberts: 377-6408, Twitter: @IDS_BillRoberts