Monday after the closing bell, memory chip maker SanDisk Corp. (SNDK) reported a net loss for the second quarter, compared to profit last year, hurt by lower-than expected sales and the rapid deterioration in consumer confidence. On a non-GAAP basis, the company's results failed to meet Street expectations. Following the news, SanDisk shares lost 13.27% or $2.38 in the after-hours trading.
The Milpitas, California-based company posted a GAAP net loss of $67.9 million or $0.30 per share, compared to GAAP net income of $28.5 million or $0.12 per share in the prior year quarter.
Excluding acquisition-related charges and share-based compensation expense, non-GAAP net loss would have been $22 million or $0.10 per share, compared to non-GAAP net income of $72 million or $0.30 per share in the year-ago quarter. On average, eighteen analysts polled by First Call/Thomson Financial expected the company to earn $0.13 per share for the second quarter.
Total revenues for the second quarter declined to $816.0 million from $827.0 million in the same quarter last year. Nineteen analysts had a consensus revenue estimate of $906.08 million for the second quarter.
Eli Harari, Chairman and CEO of SanDisk, said, "Our second quarter sales were well below our expectations due to the rapid deterioration in consumer confidence which impacted our sales in U.S. retail and to handset OEMs. Product gross margin was negatively impacted by the lower sales volume and a substantial inventory write-down."
Product revenue declined 5% to $688 million, while license and royalty revenue grew 20% to $129 million over last year.
Total megabytes sold in the second quarter jumped 120% from the previous year quarter. Average price per megabyte sold declined 55%. Average retail card capacity of 2.36 gigabytes increased 64% on a year-over-year basis.
In addition, SanDisk said it currently expects to start the next phase of production ramp in Fab 4 no sooner than April 2009. The company also said that it is delaying investment in Fab 5 in order to reduce future capital expenditures and inventory growth to maintain a strong balance sheet.
For the first half of 2008, the company's GAAP net loss was $49.9 million or $0.22 per share, compared to GAAP net income of $27.9 million or $0.12 per share in the previous year period.
On a non-GAAP basis, net income fell to $25.4 million or $0.11 per share from $116.7 million or $0.49 per share in the prior year period.
Total revenue for the year-to-date period increased to $1.67 billion from $1.61 billion in the preceding year period.
SanDisk shares closed Monday's regular trading session at $17.93, up 36 cents or 2.05% on a volume of 17.46 million shares, compared to a 3-month average trading volume of 10.20 million shares. However, in the after-hours, the shares lost $2.38 or 13.27%.
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