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Micron Confirms DRAM Pricing Slide; Bottom Line Tops Expectations

Micron Technology ( MU ) stock was up 2.5% in after-hours trading Wednesday, after the memory chipmaker reported a Q2 bottom-line beat despite a 10% average price reduction in DRAM (dynamic random-access memory) chip prices. Wall Street was expecting the DRAM pricing decline. Micron stock rose a fraction in Wednesday’s regular session, to 10.48. For its fiscal Q2 ended March 3, Micron reported a 30% year-over-year dip in sales to $2.93 billion and a 5-cent per-share loss ex items, vs. 81 cents earnings per share minus items in the year-earlier period. Sales missed the consensus of 33 analysts polled by Thomson Reuters for $3.05 billion, but the bottom line beat, as analysts modeled an 8-cent per-share loss ex items. Both measures were in line with Micron’s three-months-ago guidance for $2.9 billion to $3.2 billion and 5-12 cents in per-share losses. Micron CEO Mark Durcan noted the tough DRAM environment, which analysts say is under pressure by excess supply from South Korean rivals Samsung and SK Hynix. DRAM sales price and volume declined by 10% sequentially in Q2. Nonvolatile memory sales declined 6% quarter over quarter, on a 15% decline in average sales prices, partially offset by greater sales volume, Micron said. “Although we continue to navigate challenging market conditions, we are on track with deploying our advanced DRAM and Nand (flash memory) technologies and improving our cost structure,” Durcan said in the company’s earnings release. Durcan said he expects Micron to improve its competitive position is the second half of 2016.

Allscripts Lands A Deal; Cerner Faces A Challenge At MedStar

Allscripts Healthcare Solutions ( MDRX ) stock jumped again Wednesday, with Wall Street “extremely encouraged” by a deal to extend Allscripts’ information tech to University Hospitals in northeast Ohio through 2024. Meanwhile, Allscripts’ No. 1 rival  Cerner ( CERN ) was helping its Baltimore-based customer MedStar, after an apparent virus infected MedStar’s computers. The hospital chain — said to be the the largest civilian health care organization in the Washington, D.C., area — shut down its entire network “to prevent virus spread,” MedStar tweeted Tuesday. “We have no evidence of compromised information. All facilities remain open.” Wednesday morning, MedStar posted to Facebook: “Thanks to our IT and Cyber teams, our analysis continues to show no patient or associate data have been compromised. All major clinical systems are working toward full restoration.” Cerner spokeswoman Marlene Bentley advised IBD in an email that “while all systems were taken offline as a precaution, Cerner solutions — including the MedConnect EHR system — were not penetrated. The MedConnect system is now online at limited facilities, and we continue to work closely with our client as the broader IT framework is brought back online.” Departing MedStar nurses, meanwhile, told CBS News that staff was delivering care using paper records. Cerner and MedStar entered into a seven-year IT deal in October 2014. Allscripts stock rose as much as 4.6% in the stock market today  after rising 5.4% on Tuesday, and closed Wednesday at 13.10, up 2.3%. Cerner stock rose a fraction Wednesday but is 30% off a record high touched nearly a year ago. Allscripts Platforms Headed To Five More Hospitals Allscripts didn’t specify the value of the agreement announced Tuesday after the close, but it has already deployed its Sunrise Clinical Manager platform in nine University Hospitals in and around Cleveland. The deal calls for five more Sunrise platforms to be installed in five hospitals recently acquired by UH. The hospital chain will also increase use of Allscripts’ database software, called dbMotion, Allscripts said in its announcement. “Because dbMotion harmonizes information from disparate clinical systems and brings actionable data to the point of care, UH will be positioned to more effectively coordinate care across settings,” Allscripts said. Canaccord Genuity analyst Richard Close reiterated a buy rating on Allscripts stock, with an 18 price target. In a research note, he said he was “extremely encouraged by today’s announcement, which echos our view that MDRX continues to improve its competitive position. “MDRX’s investor meeting held during the (Las Vegas Healthcare Information and Management Systems Society) conference (ended March 4) provided confidence that existing customers were satisfied with MDRX and looking to continue and expand their relationship,” Close wrote. University Hospitals’ 18 hospitals include Cleveland’s Case Medical Center, the academic hospital of Case Western Reserve University. “This large extension of (Allscripts’) footprint at University Hospitals is an additional proof statement of Allscripts’ return to competitiveness in the enterprise systems market, as this contract extension was a competitive bid against established competitors in the market,” wrote RBC Capital Markets analyst David Francis in a Wednesday research note. RBC maintains an outperform rating on Allscripts stock, with a 17 price target. MedStar Virus Raises Worries Regarding the MedStar computer virus in Baltimore and Washington, Rachel Ehrenfeld, CEO of the American Center for Democracy and the Economic Warfare Institute, told IBD via email that “while physical security is important, the damage caused by hacking into a hospital IT could cause short- and long-term horrendous damages. “If the system is secure and functioning, it could possibly prevent or limit the scope of a physical attack.” In its October 2014 MedStar announcement, Cerner said it would “develop technologies that align with MedStar’s vision to be the trusted leader in caring for people and advancing health. The new alignment will allow access to all Cerner solutions and services throughout MedStar’s 10 hospitals and 3,000-plus beds, as well as the ambulatory and post-acute network. Cerner will provide MedStar an expanded enterprise Electronic Health Record (EHR) that will provide clinicians seamless access to patient information across the continuum of care.” Image provided by Shutterstock .

The Force Awakens Hasbro And Mattel; Star Wars Drives Profits

The big story in the toy business is the screaming success of the seventh and latest offering in the Star Wars franchise, “The Force Awakens.” The industry group has risen from No. 55 three weeks ago to No. 23 as of Tuesday’s IBD, bolstered in part by cheery Q4 reports that included Christmas sales. The group has six members, but four are low-priced and thinly traded. The business is dominated by two 500-pound gorillas, Hasbro ( HAS ) and Mattel ( MAT ). The blockbuster movie — released on “Force Friday,” Dec. 18, and still in theaters — hasn’t done much to help shareholders of Disney ( DIS ), its filmmaker. The stock dropped nearly 25% between Nov. 23 and Feb. 10, although it’s recovered somewhat since its latest earnings release. Disney investors have been more focused on the entertainment giant’s problems with ESPN. But not the toy makers, especially Hasbro. Toys tied to the movie were the hottest property of 2015, helping the overall industry grow toy sales by 6.7%, according to NPD Group, a retail tracking service. The $19 billion in retail sales was the best result in more than a decade. Toys tied to movies “outperformed the market in 2015, growing by 9.4%,” NPD said in a January report. “With the early release of Star Wars toys on Force Friday, ‘Star Wars’ managed to become the No. 1 property for the year, with over $700 million in sales. It also brought in more sales and contributed more growth than ‘Jurassic World,’ ‘Minions’ and ‘Avengers’ combined.” In its Q4 report, released Feb. 8, Hasbro said the 2015 sales of boys’ toys rose 35%, riding the success of the Star Wars movie. Girls’ toys declined by 17%, the company said. Harbro’s featured item is a $140 Battle Action Millennium Falcon with pop-up Nerf launcher, lights, motion-activated sound effects and a fold-out play set. Hasbro has been been strong in the boys department for years with the success of G.I. Joe and Nerf Blasters. It hopes to strengthen its offerings for girls with Disney princess dolls, including those tied to the 2013 “Frozen” film. Investors loved Mattel’s Q4 report a week earlier, lifting the stock 13.8% the next day on monster volume. Mattel has been stronger with girls and said Barbie sales helped drive a 21% increase in EPS, even though sales were flat from a year earlier. Mattel’s website is light on Star Wars toys, but the company has geared up for last weekend’s release of “Batman v Superman: Dawn of Justice.” Talk of a possible Hasbro-Mattel merger has surfaced from time to time. Hasbro CEO Brian Goldner downplayed that possibility in the company’s earnings conference call, saying he’s interested in smaller acquisitions and is focused on his company’s strategy. A big loser in any merger would be Disney, which chortles at the thought of seeing the two deep-pocketed toy makers bid against each other. Disney is the world’s biggest licensor, with products selling $4.5 billion a year.