SanDisk Profit Falls but Still Tops Expectations
January 27 2016 - 5:30PM
Dow Jones News
SanDisk Corp. said profit slid in its latest quarter as the chip
maker booked merger-related charges ahead of its planned
acquisition by hard-drive maker Western Digital.
Adjusted results, though, topped expectations and sent shares up
1.3% in after hours trading. The stock fell 17% in the past three
months through Wednesday's close.
The companies struck a roughly $19 billion deal in October, one
that came amid a wave of mergers across the semiconductor market as
chip makers and their suppliers grapple with slower growth, rising
competition and technology shifts across the electronics
industry.
In the fourth quarter, SanDisk, based in Milpitas, Calif.,
recorded $28.1 million in charges stemming from the merger. At the
same time, sales slid 11%. While the company has benefited from
growing demand for products such as smartphones, results have been
dented by issues including lower-than-expected sales of enterprise
products.
On Wednesday, Chief Executive Sanjay Mehrotra said SanDisk made
"substantial progress" in the second half of the year in
reinvigorating its portfolio.
Overall, the company reported a profit of $135.5 million, or 65
cents a share, down from $201.9 million, or 86 cents, a year
earlier. Excluding restructuring costs, among other items, earnings
per share fell to $1.26 from $1.30.
Revenue declined 11% to $1.54 billion.
Analysts projected 89 cents in adjusted earnings per share on
$1.44 billion in sales, according to Thomson Reuters.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
(END) Dow Jones Newswires
January 27, 2016 17:15 ET (22:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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