Wednesday, January 26, 2011

SanDisk Corp. (NASDAQ: SNDK): Q4 Earnings Preview 2010

SanDisk Corp. (NASDAQ: SNDK), the world's largest flash-memory device maker, is scheduled to release its fourth-quarter earnings after the closing bell on Thursday, January 27, 2011. Analysts, on average, expect the company to report earnings of $1.08 per share on revenue of $1.31 billion. In the year ago period, the company reported earnings of $1.18 per share on revenue of $1.24 billion.

SanDisk Corporation designs, develops, manufactures, and markets NAND-based flash storage card products that are used in various consumer electronics products.

In the preceding third-quarter, the Milpitas, California-based company's net income was  $322.1 million, or $1.34, compared to $231.3 million, or 99 cents a share, in the year-ago quarter.  On an adjusted basis, the company earned $1.30 a share in the latest quarter. Revenue increased 32% to $1.23 billion from $935.2 million. Analysts, on average, expected the company to report earnings of $1.05 per share on revenue of $1.24 billion.

At its last earnings call in October, the company said that it expects fourth-quarter sales in the range of $1.25 billion to $1.33 billion. “For 2011, we are bullish about continuing growth in our diversified channels, including further substantial inroads for our embedded storage products in smart phones, tablet PCs and other mobile devices,” former Chief Executive Eli Harari said.

According to DRAMexchange, NAND flash memory sales is expected to grow 16 percent to reach $21.5 billion in 2011.

Global demand for flash memory has continued to remain strong, thanks to the introduction of a wide array of new handheld devices like smartphones, tablets, e-books. Analysts have noted that its stock is linked somewhat to Apple's (NASDAQ: AAPL), because Apple is such a voracious consumer of flash, which is found in iPads, iPhones and iPods. SanDisk sells removable flash-memory cards and supplies memory chips to Apple Inc., whose iPad, iPhone and iPod all use so-called Nand flash as their main storage for music and data. Apple’s new MacBook Air laptop, introduced in October 2010, also uses flash memory in lieu of a traditional hard-disk drive. SanDisk said in december that more computer makers are going to follow Apple Inc.'s example and offer machines with only solid state drives in the future, a transition that will benefit the flash-memory maker. Already, companies like EMC (NYSE: EMC) and IBM (NYSE: IBM) have thrown weight behind the technology.

SanDisk is also exploring the enterprise potential of SSDs. "Enterprise requires different types of architecture, and we will be in that area," explained former CEO Harari. "Our initial focus is on the much larger market, which is netbooks, notebooks and tablets, but we [also] intend to be in the enterprise market."

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