SanDisk Beats Profit Expectations on Spurt in Retail Sales
Data storage products maker SanDisk Corp reported a quarterly profit that was double what analysts had expected, helped by higher retail sales and new products.
The company’s shares rose 13 percent to $61.20 in after-market trading on Wednesday.
“Expectations were very, very low heading into earnings,” Wedbush Securities Betsy Van Hees said, adding that analysts had aggressively cut profit estimates for SanDiskbefore its quarterly report.
The company has been grappling with a delay in sales of certain embedded parts used in solid-state drives, which are faster and more reliable than traditional hard disk drives. Lower pricing and lean inventory levels have also weighed on recent results.
In April, SanDisk reported its first quarterly revenue decline in two years, forcing it to announce plans to cut 5 percent of its non-factory headcount to reduce costs. The company also warned that second-quarter revenue was likely to fall.
Total revenue fell 24 percent to $1.24 billion (roughly Rs. 7,896 crores) in the second quarter, hurt by lower sales of solid-state drives, but beat the average analyst estimate of $1.20 billion (roughly Rs. 7,641 crores), according to Thomson Reuters I/B/E/S.
However, retail sales as a percentage of total revenue rose to 39 percent in the quarter ended June 28, from 33 percent a year earlier.
SanDisk, which makes products for cloud computing and data centres, as well as smartphones and laptops, forecast current-quarter revenue of $1.35 billion-$1.45 billion (roughly Rs. 8,596 crores – roughly Rs. 9,233 crores).
Analysts were expecting revenue of $1.41 billion (roughly Rs. 8,978 crores).
SanDisk’s net income plunged to $81 million (roughly Rs. 515 crores), or 38 cents per share, from $274 million (roughly Rs. 1,744 crores), or $1.14 per share, a year earlier.
Excluding items, the company earned 66 cents per share, double the average analyst estimate of 33 cents.
SanDisk’s shares, which have fallen nearly 45 percent this year, closed at $54.18 on the Nasdaq.