Earnings Preview: SanDisk Corp. (NASDAQ: SNDK) Third Quarter 2010
Thursday, October 14, 2021 1:29 PM

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SanDisk Corp. (NASDAQ: SNDK), the world's largest flash-memory device maker, is scheduled to release its third quarter earnings after the closing bell on Thursday, October 21, 2010. Analysts, on average, expect the company to report earnings of $1.05 per share on revenue of $1.24 billion. In the year ago period, the company reported earnings of 75 cents per share on revenue of $935.17 million.

SanDisk Corporation designs, develops, manufactures, and markets NAND-based flash storage card products that are used in various consumer electronics products. The company's solutions include removable cards, embedded products, universal serial bus (USB) drives, digital media players, wafers and components. The removable card products are used in a range of consumer electronics devices, such as mobile phones, digital cameras, gaming devices and laptop computers.

In the preceding second quarter, the Milpitas, California-based company's net income was $257.9 million, or $1.08 a share, compared $52.5 million, or 23 cents a share, in the year-ago quarter. On an adjusted basis, the company earned $1.08 per share in the second quarter. Revenue surged 61% to $1.18 billion from $730.6 million in the same quarter last year. Analysts, on average, expected the company to report earnings of 90 cents per share on revenue of $1.16 billion. GAAP gross margin for the second quarter improved to 46.3% from 34.1% a year ago, while non-GAAP gross margin increased to 46.7% from 34.8% last year.

The company anticipates expect third quarter total revenue to be between $1.175 billion and $1.25 billion. Within this total third quarter revenue, the company expects license and royalty revenue to be between $90 million and $100 million.
SanDisk has benefited significantly from growing popularity of smartphones, MP3 music players, tablet computers and other consumer electronics devices. Late in July, the company boosted its full year revenue guidance to $4.7 billion and $4.9 billion, from its prior forecast in the range of $4.5 billion to $4.8 billion. The company expects full-year license and royalty revenue between $360 million and $375 million.

The company expects its full-year cost per gigabyte improvement to be better than 40% and expects the pricing environment to remain favorable. In the second half, SanDisk anticipates some unfavorable gross margin impact from non-captive supply and from the Yen to dollar exchange rate. Based upon all of these factors, the company expects the product gross margin percentage in the second half to be roughly comparable to the first half of the year.

In the second half, the company expects customer demand to exceed its supply, driven primarily by strong mobile OEM sales as well as seasonal improvement in retail demand.

Global demand for flash memory has continued to remain strong, thanks to the introduction of a wide array of new handheld devices like Smart phones, tablets, e-books. According to market research firm iSuppli, shipments of NAND flash are expected to reach 1.7 billion gigabytes next year, up 296 per cent from 428 million gigabytes in 2010.

In terms of stock performance, SanDisk shares have gained nearly 20 percent since the beginning of the year.

Disclosure: Author doesn't own any of the stocks discussed here.

 

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