By Lisa Beilfuss
SanDisk Corp. said profit plunged 86% in the first quarter, as
revenue fell and the company booked acquisition and
restructuring-related charges.
SanDisk reported a profit of $39 million, or 17 cents a share,
down from $269 million, or $1.14 a share, a year earlier. Excluding
one-time charges, the company booked 62 cents a share in profit,
down from $1.44 in the previous year's first quarter.
Analysts, according to Thomson Reuters, expected 66 cents a
share of earnings.
Revenue fell 12% to $1.33 billion. The company had expected $1.3
billion, an estimate it trimmed last month from a previous range of
$1.4 billion to $1.45 billion.
"We are disappointed with our financial and operational
performance and are quickly taking aggressive measures to regain
the excellence in execution that we have delivered in the past,"
said Chief Executive Sanjay Mehrotra. "Our top priorities for 2015
are to strengthen our product road map and rebuild our momentum
across the business," he added.
The Silicon Valley-based company, a major maker of flash-memory
chips, has benefited from the explosive growth in demand for
products such as smartphones.
But the company warned about revenue twice since the start of
the year, most recently late last month when it said the metric
would come in about 9% below the midpoint of its previous forecast
and that full-year revenue would miss expectations by an
unspecified amount.
SanDisk cited unspecified product-qualification delays along
with lower-than-expected sales of enterprise products and lower
pricing. In January, the company blamed weaker sales of its retail
and iNAND flash memory products and pointed to maintenance issues
with production lines in Japan that had affected inventories.
Compounding its problems was the loss of a major customer for
its solid-state drives, which are flash-based devices that store
data in computers. Some analysts believe Apple Inc. switched to
Samsung from SanDisk for SSDs.
Analysts at Wedbush estimate SSD revenue from Apple was $441
million in 2014, about 7% of SanDisk's top line, and they say
SanDisk could be at risk to losing market share to Samsung in
Apple's coming iPhone 6S.
Revenue from enterprise solutions, an area SanDisk had
identified as a major growth opportunity, was 14% of overall
revenue, up from 6% a year ago.
SanDisk shares fell 1.2% to $69.89 in after-hours trading. The
stock had fallen 27% this year through Wednesday's close.
Access Investor Kit for Apple, Inc.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US0378331005
Access Investor Kit for SanDisk Corp.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US80004C1018
Subscribe to WSJ: http://online.wsj.com?mod=djnwires