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SanDisk forecasts lower revenue

By Reuters
US, 17 Oct 2014

Chipmaker SanDisk forecasts current-quarter revenue below analysts' estimates due to supply constraints.

SanDisk's shares fell 5% in extended trading, after the company also reported lower-than-expected revenue for the third quarter.

SanDisk, a supplier of memory chips for Apple's iPhones, in June bought Fusion-io, a solid-state storage products maker.

Rival Samsung said last week it would spend $15 billion to build a major new factory in South Korea to make either memory chips or logic chips.

SanDisk forecast revenue of $1.80 billion-$1.85 billion for the fourth quarter ending December. Analysts on average were expecting $1.88 billion, according to Thomson Reuters.

The company's GAAP net income fell 5% to $262.7 million, or $1.09 per share, in the third quarter ended 28 September as expenses rose 25% from the prior quarter, mainly due to costs related to restructuring and the acquisition of Fusion-io.

Excluding the restructuring items and other non-cash items, SanDisk earned $1.45 per share. Revenue rose 7% to $1.75 billion.

Analysts on average had expected a profit of $1.33 per share and revenue of $1.77 billion.

The revenue miss "is a bit of negative surprise given how strong the launch of the Apple's next-gen iPhones have been and the addition of recent acquisition Fusion IO," Wedbush Securities analyst Betsy Van Hees told Reuters.

SanDisk also said it would pay a quarterly dividend of 30 cents per share.

The company's shares closed at $85.31 on the Nasdaq on Thursday. Up to Thursday's close, the stock had risen 21% this year.

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