SanDisk Q4 Profit Plunges, Stock Down 6%

(RTTNews) - SanDisk Corp (SNDK) on Wednesday reported a plunge in profit for the fourth quarter, as the flash memory card maker's bottom line was weighed down by lower margins, higher operating expenses and supply constraints. Nonetheless, both earnings and revenues for the quarter came in ahead of Wall Street estimates.

SanDisk also authorized an additional stock buy back of $2.5 billion. Shares of SanDisk dropped a near 6 percent in the after-hours trade on the Nasdaq, following the news.

Milpitas, California-based SanDisk's fourth-quarter profit dropped to $201.9 million or $0.86 per share from $337.8 million or $1.45 per share last year.

Excluding special items, adjusted earnings for the quarter dropped to $1.30 per share from $1.71 per share a year ago. On average, 31 analysts polled by Thomson Reuters estimated earnings of $1.27 per share for the quarter. Analysts' estimates typically exclude one-time items.

Revenues for the fourth quarter rose to $1.74 billion from $1.73 billion in the prior year. Twenty-four analysts had a consensus revenue estimate of $1.73 billion for the quarter.

SanDisk Chief Sanjay Mehrotra said, "We are disappointed with our fourth quarter results, which were impacted primarily by supply constraints. We believe that NAND flash industry fundamentals are healthy, and we expect our financial results to improve as we move through 2015."

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

Gross margin for the quarter decreased to 43 percent from 50 percent last year, while operating expenses rose to $411.5 million from $349.7 million last year.

Separately, SanDisk's Board authorized an additional $2.5 billion common stock repurchases under its existing stock buy-back program. The company now has about $3.0 billion remaining available for stock repurchases under the expanded program.

The company also declared a quarterly dividend of $0.30 per share, payable on March 23 to shareholders of record on March 2.

SNDK closed Wednesday's trading at $80.44, up $1.64 or 2.08%. The stock, however, dropped $4.76 or 5.72% in the after-hours trade.