SanDisk's modest revenue forecast prompts selloff
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 Wall Street's 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 Mehrotra said SanDisk will increase its supply of NAND by less than the industry average in 2013, and the company's revenue forecast for the first quarter fell short of Wall Street's estimates, prompting a selloff.
"The problem is you're just not getting the double whammy," said RBC Capital analyst Doug Freedman. "You're looking for not only a growth in average selling prices, but a growth in units, and they're not forecasting a very big growth in units."
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.
The company 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 applications.
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
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