SanDisk Reports Higher-Than-Expected Adjusted Quarterly Profit

Earnings Reuters

Chipmaker SanDisk Corp (SNDK) reported a 5 percent fall in quarterly profit as expenses rose, mainly due to costs related to restructuring and its acquisition of solid state storage products maker Fusion-IO Inc in June.

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SanDisk's shares fell about 3 percent in extended trading, after the company also reported lower-than-expected revenue.

The company, which supplies memory chips for Apple Inc's iPhones, is increasing its focus on high-end solid-state drives (SSDs) to offset the impact of volatility in prices of memory chips due to addition of new capacity.

Rival Samsung Electronics Co Ltd said last week that it would spend $15 billion to build a major new factory in South Korea to make either memory chips or logic chips.

SanDisk's net income fell to $262.7 million, or $1.09 per share, in the third quarter ended Sept. 28 from $276.9 million, or $1.18 per share, a year earlier, as expenses rose 9 percent.

Excluding item, SanDisk earned $1.45 per share.

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Revenue rose 7 percent to $1.75 billion.

Analysts on average had expected a profit of $1.33 per share and revenue of $1.77 billion, according to Thomson Reuters I/B/E/S.

The revenue miss "is a bit of negative surprise given how strong the launch of the Apple's next gen iPhones have been and the addition of recent acquisition Fusion IO," Wedbush Securities analyst Betsy Van Hees told Reuters.

SanDisk also said it would pay a quarterly dividend of 30 cents per share.

The company's shares closed at $85.31 on the Nasdaq on Thursday. Up to Thursday's close, the stock had risen 21 percent this year.

(Reporting by Soham Chatterjee in Bangalore; Editing by Kirti Pandey)