SanDisk dives on lower forecast

Milpitas flash memory maker SanDisk saw its stock dive nearly 17 percent Thursday after it lowered its first-quarter earnings forecast, the second quarter in a row it has done so.

The company said it now expects earnings for the quarter that ends March 29 to be about $1.3 billion, down from a previously forecasted $1.4 billion to $1.45 billion. It also withdrew other forecasts for the quarter and the year, and said it would provide an update at its first-quarter earnings call on April 15.

An investor day scheduled for May was also cancelled and will be rescheduled for a later date, the company said in a news release.

SanDisk said lower-than-expected sales of enterprise products and lower pricing “in some areas” of its market were behind the lower forecast.

“We are disappointed with our financial outlook,” said SanDisk President and CEO Sanjay Mehrota. “We will work through these headwinds, leveraging our compelling product roadmap and broadening customer base. We believe growth prospects remain strong and we are encouraged by the progress we are making in our 3D NAND technology.”

The company last year lowered its fourth-quarter forecast to revenue of about $1.73 billion, down from its previous forecast between $1.80 billion and $1.85 billion.

Analyst Ambrish Srivastava of BMO Capital Markets said in a note that the announcement “adds to a growing list of disappointments.”

Photo: The SanDisk corporate headquarters in Milpitas, Calif. on Wednesday, May 21, 2014. (Nhat V. Meyer/Bay Area News Group)

 
 

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