SanDisk Profit Drops 86%

(RTTNews) - Flash memory card maker SanDisk Corp. (SNDK) said Wednesday after the markets closed that its first quarter profit fell 86% from last year, hurt by lower revenue as well as impairment and restructuring charges.

The company's quarterly earnings per share, excluding items, also came in below analysts' expectations, but its quarterly revenue just managed to beat analysts' forecast.

"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 Sanjay Mehrotra, president and chief executive officer, SanDisk. "Our top priorities for 2015 are to strengthen our product roadmap and rebuild our momentum across the business."

The company also declared a second quarter dividend of $0.30 per share, payable on May 26 to shareholders of record on May 4.

SanDisk shares are currently losing 3.82% in after hours trading after closing the day's regular trading session at $71.12, up 80 cents or 1.13%. The shares trade in a 52-week range of $63.00 to $108.77.

SanDisk makes removable cards, embedded flash products, USB flash drives and solid-state drives used in place of hard disk drives.

For the first quarter ended March 29, 2015, the Milpitas, California-based company reported net income for the first quarter of $39.0 million or $0.17 per share, compared to $268.9 million or $1.14 per share for the year-ago quarter.

Excluding items, adjusted net income for the first quarter was $133.7 million or $0.62 per share, compared to $330.0 million or $1.44 per share in the prior year quarter.

On average, 25 analysts polled by Thomson Reuters expected the company to earn $0.66 per share for the first quarter. Analysts' estimates typically exclude special items.

Gross margin for the quarter narrowed to 41% from 50% a year ago, while operating margin shrank to 4% from 28% last year.

Revenue for the first quarter fell 12% to $1.33 billion from $1.51 billion in the same quarter last year. Twenty-four analysts had a consensus revenue estimate of $1.31 billion for the first quarter.

SanDisk had lowered its first quarter revenue outlook late last month to $1.3 billion from its earlier outlook of $1.40 billion to $1.45 billion, citing certain product qualification delays, lower than expected sales of enterprise products and lower pricing in some areas of the business.