SanDisk Earnings: Exceeds Analysts’ Revenue Estimate

S&P 500 (NYSE:SPY) component SanDisk Corporation (NASDAQ:SNDK) reported its results for the third quarter. SanDisk is a multinational corporation whose main focus is the design, development, manufacturing and marketing of flash memory card products. Its data-storage solutions include removable cards and universal serial bus drives, which can be used in a wide gamut of consumer electronics products, such as digital cameras and mobile phones.

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SanDisk Corporation Earnings Cheat Sheet

Results: Net income for SanDisk Corporation fell to $76.5 million (31 cents per share) vs. $233.3 million (96 cents per share) a year earlier. This is a decline of 67.2% from the year-earlier quarter.

Revenue: Fell 10.1% to $1.27 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: SanDisk Corporation fell short of the mean analyst estimate of 37 cents per share. It beat the average revenue estimate of $1.02 billion.

Quoting Management: “Our retail business delivered strong results in Q3 and we believe we gained share across all major geographies worldwide on the strength of the SanDisk brand,” said Sanjay Mehrotra, president and chief executive officer of SanDisk. “Our results also reflect a solid recovery in our mobile embedded business and we made good progress toward expanding our SSD product roadmap. We believe we are well positioned to build on our business momentum and improved industry fundamentals to deliver strong sequential growth in the fourth quarter.”

Key Stats:

Last quarter was the fifth in a row that the company saw shrinking gross margins, as they fell 13.2 percentage points from the year-earlier quarter to 30.1%. Over that time, margins have contracted on average 9.7 percentage points per quarter on a year-over-year basis.

The company has now come in under analyst forecasts for three quarters in a row. It missed the mark by 2 cents in the second quarter and by 5 cents in the first quarter.

Revenue has fallen for the past three quarters. In the second quarter, revenue declined 24.9% to $1.03 billion while the figure fell 6.8% in the first quarter from the year earlier.

Net income has dropped 56.1% year-over-year on average across the last five quarters. Performance was hurt by a 94.8% decline in the second quarter from the year-earlier quarter.

Looking Forward: Over the past ninety days, the average estimate for the fourth quarter has fallen from 67 cents per share to 59 cents, indicating that analysts are growing pessisimistic about the company’s performance next quarter. The average estimate for the fiscal year is $1.63 per share, down from $2.01 ninety days ago.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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