Earnings Preview: SanDisk Corporation (SNDK) – Earnings Expected In Line
By:NewsyStocks   Wednesday, January 25, 2022 2:56 PM

SanDisk Corp (SNDK) is scheduled to report its fourth quarter earnings today after the market close. With a strong market position, SanDisk will benefit from a better than seasonal quarter for NAND and SSD manufacturers.

SanDisk is expected to post earnings of $1.27 a share indicating a year over year increase of 8.5 percent. Revenue for the quarter is anticipated to touch $1.57 billion – in line with company's guidance of $1.5 billion - $1.6 billion. For the full year 2011, the company predicted revenue in the range of $5,585 million to $5,685 million.

Deutsche Bank reiterated its Buy rating on SNDK on Monday and issued a price target of $55. DB cited SanDisk's strong competitive position and favorable market conditions as the main reasons for the positive outlook on the stock.

On an average, analysts maintain a Buy rating on SNDK with 18 out of 26 sharing that view. Over the course of the quarter, the market sentiment on SanDisk's stock has improved considerably.

Third Quarter Results & Earnings History

Higher 3Q expenses resulted in EPS declining to $233 million or $0.96 per share compared with $322 million/$1.34 per share in the year-ago period. Revenue in the third quarter grew 15 percent year-over-year to $1.42 billion in spite of a slight drop in royalty revenues.

The company has experienced shrinking profits in the 3 reported quarters of FY2011 falling 4.5 percent in the first quarter, 3.7 percent in the second quarter and 27.6 percent in the third period year-over-year respectively.

Our Take

SanDisk continues to outperform its competition and a favorable macro environment for semiconductor companies ensures its market leadership. For the year 2011 SanDisk's product revenue growth will outpace the growth of the NAND industry and give it a competitive advantage going into FY2012.

SanDisk remains a strong pick among semiconductor stocks and looks poised for further growth. A major focus on today's conference call will be the company's margins and how well it has been able to keep costs under control. The company has consistently beaten Street estimates in the past and looks on course to do so again.