SanDisk Profit Tops Estimate; Revenue Falls Shy

(RTTNews) - Flash memory card maker SanDisk Corp. (SNDK) said Thursday after the markets closed that its third quarter profit fell 5% from last year, as higher costs and expenses more than offset a 7% increase in revenue.

However, the company's quarterly earnings per share, excluding items, came in above analysts' expectations, but its quarterly revenue fell shy of analysts' forecast.

"Third quarter results reflect the strength of our diversified product portfolio, broad customer engagements and solid execution," said Sanjay Mehrotra, SanDisk president and chief executive officer. "Demand for NAND flash continues to be strong across mobile, client and enterprise, where SanDisk's innovations are creating significant opportunities. As we focus on closing a record 2014, we also look forward to building upon our success in 2015."

SanDisk shares are currently losing 2.12% in after hours trading after closing the day's regular trading session at $85.31, up 96 cents or 1.14%. The shares trade in a 52-week range of $64.50 to $108.77.

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

In July, SanDisk completed the acquisition of Fusion-io, a developer of flash-based PCIe hardware and software solutions, for about $1.1 billion, net of cash.

For the third quarter ended September 28, 2014, the Milpitas, California-based company reported net income of $262.7 million or $1.09 per share, compared to $276.9 million or $1.18 per share for the year-ago quarter.

Excluding items, adjusted net income for the third quarter was $335.5 million or $1.45 per share, compared to $370.7 million or $1.59 per share in the prior year quarter.

On average, 26 analysts polled by Thomson Reuters expected the company to earn $1.33 per share for the third quarter. Analysts' estimates typically exclude special items.

Gross margin for the quarter narrowed to 47% from 49% a year ago, while operating margin shrank to 22% from 25% last year.

Revenue for the third quarter rose 7% to $1.75 billion from $1.63 billion in the same quarter last year. Twenty-seven analysts had a consensus revenue estimate of $1.77 billion for the third quarter.

SanDisk also declared a fourth quarter dividend of $0.30 per share, payable on November 24 to shareholders of record on November 3.