MILPITAS (dpa-AFX) - Flash memory card maker SanDisk Corp (SNDK), Wednesday reported a better-than-expected rise in second-quarter profit as demand for solid-state disks lifted sales by 11 percent, partly offset by soft margins.
SanDisk, which in June agreed to acquire smaller peer Fusion-io, said prospects for the remainder of the year appear bright. The quarter was marked by robust sales in both enterprise and client solid-state drives, as well as retail products, said SanDisk CEO Sanjay Mehrotra.
SanDisk also announced a quarterly dividend of $0.30 per share.
Nonetheless, investors shrugged off the positive results, sending SanDisk shares down over 8 percent in after-hours trade on the Nasdaq.
SanDisk makes removable cards, embedded flash products, USB flash drives and solid-state drives used in place of hard disk drives.
The Milpitas, California-based company reported second-quarter net earnings of $274 million or $1.14 per share, compared with $262 million or $1.06 per share last year.
Excluding items, adjusted earnings for the quarter were $329 million or $1.41 per share, compared with $299 million or $1.22 per share a year ago.
On average, 27 analysts polled by Thomson Reuters projected earnings of $1.39 per share for the quarter. Analysts' estimates typically exclude special items.
Revenue for the second quarter was up at $1.63 billion, compared with $1.48 billion in the prior year. Twenty-eight analysts had a consensus revenue estimate of $1.60 billion for the quarter.
Solid-state drives, or SSD solutions, comprised 29 percent of revenue, up from 16 percent last year, the company said.
Results were somewhat muted by gross margin that was unchanged from last year at 46 percent, while operating margin slipped 20 basis points to 25 percent.
In June, SanDisk agreed to acquire smaller peer Fusion-io (FIO) for $1.1 billion, net of cash assumed. The deal is part of efforts by SanDisk to help the flash-transformed data center and enable companies to efficiently manage heavy data workloads.
SanDisk stock closed Wednesday at $107.83, up 2.27 $ or 2.15%, on a volume of 5.6 million shares. In after hours, the stock dropped $9.18 or 8.51%.
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