SanDisk Fourth Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component SanDisk (NASDAQ:SNDK) will unveil its latest earnings tomorrow, Wednesday, January 23, 2013. 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.

SanDisk Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for profit of 68 cents per share, a decline of 45.2% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved up from 54 cents. Between one and three months ago, the average estimate moved up. It has been unchanged at 68 cents during the last month. Analysts are projecting profit to rise by 58% compared to last year’s $1.83.

Past Earnings Performance: The company beat estimates last quarter after falling short in the prior two. In the third quarter, the company reported net income of 42 cents per share versus a mean estimate of profit of 29 cents per share. In the second quarter, the company missed estimates by 2 cents.

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A Look Back: In the third quarter, profit fell 67.2% to $76.5 million (31 cents a share) from $233.3 million (96 cents a share) the year earlier, but exceeded analyst expectations. Revenue fell 10.1% to $1.27 billion from $1.42 billion.

Here’s how SanDisk traded following its last earnings report 3 months ago and leading up to its upcoming earnings report this week:

SNDK

Stock Price Performance: Between November 16, 2012 and January 16, 2013, the stock price had risen $7.61 (19.3%), from $39.46 to $47.07. The stock price saw one of its best stretches over the last year between January 8, 2013 and January 16, 2013, when shares rose for seven straight days, increasing 4.3% (+$1.96) over that span. It saw one of its worst periods between October 19, 2012 and October 26, 2012 when shares fell for six straight days, dropping 4.1% (-$1.79) over that span.

Wall St. Revenue Expectations: Analysts predict a decline of 3.2% in revenue from the year-earlier quarter to $1.53 billion.

Key Stats:

On the top line, the company is hoping to use this earnings announcement to snap a string of three-straight quarters of revenue declines. Revenue fell 6.8% in the first quarter and 24.9% in second quarter before falling again in the third quarter.

The company is trying to stem some negative momentum heading into this earnings announcement. Profit has dropped by a year-over-year average of 63.3% over the past four quarters.

Analyst Ratings: With 16 analysts rating the stock a buy, one rating it a sell and five rating the stock a hold, there are indications of a bullish stance by analysts.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 2.28 last quarter. Having a ratio above 2:1 is usually considered a good indicator of a company’s liquidity and ability to meet creditor demands. The company improved this liquidity measure from 2.27 in the second quarter to the last quarter driven in part by an increase in current assets. Current assets increased 4.4% to $4.32 billion while liabilities rose by 4% to $1.9 billion.

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