Oct. 29 (Bloomberg) -- SK Hynix Inc., the world’s second-largest maker of memory chips, posted profit that missed analyst estimates after a fire at a factory last month crimped output during the period when demand is typically strong.
Net income, excluding minority interest, rose to 958.3 billion won ($903 million) in the three months ended September from 1.9 billion won a year earlier, Icheon, South Korea-based SK Hynix said today. That compares with the 988 billion-won average of 22 analysts’ estimates compiled by Bloomberg.
SK Hynix, a supplier to Apple Inc. and Sony Corp., will cut its NAND flash capacity as much as 30 percent in the fourth quarter to boost output of dynamic random-access memory chips and counter the impact of the Sept. 4 blaze in Wuxi, China. The fire pushed prices of DRAM chips to a more than two-year high and restoration of the factory may be delayed a month beyond the November target date.
“Potential delay of restoration at the fire-damaged plant signals the overall memory chips will remain in shortage in the fourth quarter and well into the first quarter,” Nam Dae Jong, a Hana Daetoo Securities Co. analyst, said in Seoul today. “SK Hynix’s earnings will deteriorate in the fourth quarter due to the fire.”
SK Hynix fell 3.5 percent to close at 31,950 won in Seoul, the lowest in almost a month. The shares have gained 24 percent this year compared with the benchmark Kospi index that has added 2.7 percent in 2013.
Operating profit, or sales excluding the cost of goods sold and administrative costs, was 1.16 trillion won on revenue of 4.08 trillion won.
DRAM chips, along with NAND memory, are needed in handsets and tablet computers made by Apple, Samsung Electronics Co. and HTC Corp. for functions from playing video and multitasking to storing books and photographs.
SK Hynix shipments of DRAM chips are expected to fall about 10 percent this quarter and deliveries of NAND will drop by about 15 percent from the period ended September, said Kim Joon Ho, President and Head of Corporate Center.
The benchmark DDR3 2-gigabit dynamic random-access memory chip rose to $2.34 on Oct. 4, the highest level since it touched $2.37 in November 2010. It stood at $1.60 on Sept. 4 when the fire hit Hynix’s factory, according to DRAMeXchange, Asia’s largest market for the components.
Worldwide PC shipments fell 8.6 percent in the third quarter. The decline, the sixth consecutive drop, was tempered by growth in the U.S., where shipments climbed 3.5 percent, market researcher Gartner Inc. said earlier this month.
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