Memory chipmaker SanDisk forecasts current-quarter and full-year 2015 revenue well below Wall Street expectations, saying it would be unable to meet demand for flash memory storage chips until mid-year due to lean inventory levels.
Shares of the company, which supplies memory chips for Apple's iPhones, fell about 8% to $74.05 in after-market trading.
The company forecast first-quarter revenue of between $1.40 billion and $1.45 billion. Analysts were expecting revenue of $1.60 billion, according to Thomson Reuters.
SanDisk, which is struggling to meet demand for new NAND memory chips widely used in smartphones, cameras and other mobile devices, expects revenue to fall in the first and second quarters compared with a year ago as it works to ramp up inventory levels.
Lean inventory levels and unplanned maintenance at its chip foundry resulted in weak supply of NAND chips in the fourth quarter, the company said during a conference call yesterday.
The weaker-than-expected forecast is the result of SanDisk's failure to add production capacity in the past two years, said Pacific Crest Securities analyst Monika Garg.
The company said it expects to return to year-on-year growth in the second half of 2015, helped by an increase in production of memory chips and market share gains in its solid state drive (SSD) business.
The company's fourth-quarter results came in modestly ahead of the average analyst expectation, helped by strong growth in the SSD business.
SanDisk's net income fell to $201.9 million, or 86 cents per share, in the quarter that ended on 28 December, from $337.8 million, or $1.45 per share, a year earlier.
On an adjusted basis, the company earned $1.30 per share. Revenue rose less than 1% to $1.74 billion.
Analysts had expected a profit of $1.28 per share and revenue of $1.73 billion, according to Thomson Reuters.
SanDisk also said its board had increased the company's share repurchase programme by $2.5 billion.
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