(Recasts with revenue forecast, adds comments, updates stock
By Noel Randewich
SAN FRANCISCO Jan 23 Chipmaker SanDisk Corp's
modest revenue outlook disappointed investors looking
for a recovery in memory chips widely used in smartphones and
tablets, sending its shares down 4 percent.
Like other memory chipmakers, SanDisk has been hurt in
recent quarters by a drop in prices for NAND flash chips used in
smartphones, cameras, storage drives and tablets to store data
such as movies and photos.
The company's quarterly results on Wednesday beat analysts'
expectations and Chief Executive Sanjay Mehrotra told analysts
on a conference call he expects improved NAND pricing this year,
giving SanDisk's stock a brief boost.
But the company's revenue forecast for the first quarter
fell short of Wall Street's estimates, prompting a selloff.
SanDisk estimated revenue in the March quarter of $1.225
billion to $1.3 billion. Analysts had expected $1.372 billion,
according to Thomson Reuters I/B/E/S.
SanDisk said its fast-growing solid-state drive business
accounted for 10 percent of fourth-quarter revenue. Chief
Financial Officer Judy Bruner said solid-state drives would be
SandDisk's biggest growth driver this year, followed by embedded
Solid-state drives, which store data on flash chips and are
faster than conventional hard drives, are increasingly being
used in Ultrabook thin laptops being promoted by Intel Corp
and PC makers. High-end solid-state drives are gaining
popularity in corporate data centers.
Some analysts have recently pointed to signs that NAND
prices are stabilizing after Japanese chipmaker Toshiba scaled
back production last year.
"We think we're still better than seasonal in pricing
because there's no new supply coming on line. That's the key
metric. Demand will take care of itself," said Kevin Cassidy, an
analyst at Stifel Nicolaus.
Last year Apple Inc, a major purchaser of NAND
chips worldwide, accounted for almost 13 percent of SanDisk's
business, Bruner said.
Apple missed revenue expectations for the third straight
quarter after sales of its flagship iPhone came in below Wall
SanDisk earned $214 million, or 87 cents per share, in the
December quarter, compared to $281 million, or $1.14 per share,
in the year-ago period.
Revenue fell 2 percent year over year to $1.54 billion.
Analysts on average were expecting revenue of $1.526 billion
in the fourth quarter.
Excluding items, it earned $1.05 a share. Analysts had
expected earnings of 76 cents a share.
The company's shares fell 3.15 percent to $46.15 in extended
trade, after closing down 0.63 percent on Nasdaq.
(Reporting by Noel Randewich; Editing by Richard Chang)