MILPITAS (dpa-AFX) - Flash-memory card maker SanDisk Corp. (SNDK), Wednesday reported an increase in first-quarter profit on improved gross margins, while strong demand for its solid-state drives lifted revenues by eleven percent. SanDisk's quarterly earnings trumped Wall Street estimates easily, while revenues also exceeded expectations.
Nonetheless, SanDisk shares initially lost about five percent in after-hours trade on the Nasdaq, but later recovered. The stock is now down 0.47%.
SanDisk's results comes after successive quarters of lackluster earnings. The company has for sometime braced with sluggish demand, weaker prices for DRAM and NAND flash chips, lower margins, even as sales gained momentum for solid-state drives used in Ultrabook thin laptops. The company in the prior quarter had said that prices for the chips were strengthening.
Commenting on the quarterly results, SanDisk CEO Sanjay Mehrotra said, 'Our SSD products drove 20 percent of sales and we delivered a record first quarter retail revenue'.
'Our strong results reflect an improved product mix and continued favorable industry supply and demand conditions. We believe our position in enterprise and client SSD markets, differentiated retail brand and continued focus on profitable growth provide us with solid momentum for continued gains in 2013,' added Mehrotra.
The Milpitas, California-based company reported first quarter net income of $166 million or $0.68 per share, compared to $114 million or $0.46 per share last year.
Excluding items, adjusted earnings for the quarter were $207 million or $0.84 per share, compared to $156 million or $0.63 per share in the prior year. On average, 25 analysts polled by Thomson Reuters expected earnings of $0.77 per share for the quarter. Analysts' estimates typically exclude special items.
Total revenues for the quarter rose 11 percent to $1.34 billion from $1.21 billion a year ago. Analysts on consensus estimated revenues of $1.30 billion for the quarter.
Gross margin for the quarter expanded to 39.6 percent from 34.5 percent last year, and operating margin improved to 18.9 percent from 15.9 percent.
SanDisk closed Wednesday at $55.72, down 3.08%, on a volume of about 10 million shares on the Nasdaq. In after hours, the stock dropped 0.47%. In the past year, the stock has traded in a range of $30.99 - $58.92.
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