In a Surprise, Micron Technology CEO and Top Officers Resign
NEW YORK (AP) _ Micron Technology Inc.’s shares took a steep dive before partially recovering today, following Monday’s unexpected resignations of three top executives at the profitable computer chip maker.
Chief executive Joe Parkinson, who co-founded the company with his brother Ward in 1978, president Jim Garrett and chief financial officer Reid Langrill will leave Micron during the next month. They cited only personal reasons.
Top officers of Micron’s largest subsidiary, the chip-making operation, were named to lead the whole company.
Trading in Micron’s shares was delayed on the New York Stock Exchange this morning for nearly an hour, then they plunged $4. By midday, they had bounced back partially and were down $1.37 1/2 to $38.25.
The resignations surprised analysts because Micron, the world’s ninth- largest maker of memory chips, has had no apparent financial trouble.
It is due to report its performance for the fourth fiscal quarter later this week. Analysts have forecast a profit of $1.21 per share, down from $1.52 a year earlier.
″Usually, when you watch a company you see some shuffling around that suggests a transition,″ said Jim Handy, principal analyst at Dataquest Inc. in San Jose, Calif. ″We didn’t see anything that indicated to us there would be any change that way here.″
Company spokeswoman Julie Nash said she could not elaborate further on the resignations.
Micron, based in Boise, Idaho, has grown steadily in the past five years, taking advantage of a Japanese recession to gain market share against its toughest competitors.
The company’s emphasis on market share rather than higher profits may have been Parkinson’s undoing, analyst Richard Whittington of SoundView Financial Group told the Wall Street Journal.
″There’s been a polarization of the senior management and the board for some time,″ he said. Parkinson’s camp argued for a market-share-growing strategy and a camp led by Micron’s biggest shareholder, John R. Simplot, pushed for better returns for shareholders, Whitting said.
Under the reshuffling, the head of Micron’s semiconductor subsidiary, Steve Appleton, will take over as chief executive and chairman. The division’s chief technical officer, Tyler Lowrey, and chief financial officer, Bill Stover, will assume those titles for the entire company.
″The guys who are coming up are very strong,″ said Thomas Thornhill, an analyst at Montgomery Securities in San Francisco. ″It is a surprise that these other guys are leaving, unexpected.″
Parkinson, Garrett and Langrill will continue to consult with Micron for six months after the resignations are effective.
Micron’s stock has gone up during the past year, though the climb has sometimes been unsteady. Like other technology stocks, it is sometimes subject to sudden swings.
The company’s growth in the past two years has exceeded virtually every other memory chip maker with the exception of Korea’s Samsung Electronics, which emerged last year as the No. 1 manufacturer. Its products are used in personal computers and other electronic items.
Earlier this summer, Micron announced it would expand its test and assembly plant in Boise, where it employs 5,300 people.
Micron earned $259 million on sales of $1.14 billion during the nine months ending June 2. In addition to chip manufacturing, Micron builds computers, communications systems and display devices.