SanDisk Corp. (NASDAQ: SNDK), the world's largest flash-memory device maker, is scheduled to release its second quarter earnings after the closing bell on Thursday, July 22, 2010. Analysts, on average, expect the company to report earnings of 90 cents per share on revenue of $1.16 billion. In the year ago period, the company reported earnings of 36 cents per share on revenue of $730.57 million.
SanDisk Corporation designs, develops, manufactures, and markets NAND-based flash storage card products that are used in various consumer electronics products. The company's solutions include removable cards, embedded products, universal serial bus (USB) drives, digital media players, wafers and components. The removable card products are used in a range of consumer electronics devices, such as mobile phones, digital cameras, gaming devices and laptop computers.
In the preceding first quarter, the Milpitas, California-based company reported net income of $234.7 million, or 99 cents per share, compared to a loss of $208.0 million or 92 cents per share, in the year-ago quarter. Adjusted earnings totaled $225.0 million or 95 cents per share, compared to an adjusted loss of $108.5 million or 48 cents per share in the prior year quarter. Revenue jumped 65% to $1.09 billion from $659.47 million in the same quarter last year. Analysts, on average, expected the company to earn 59 cents per share on revenue of $985.85 million.
The company has benefited greatly from growing popularity of smartphones, MP3 music players, tablet computers and other consumer electronics devices. In April, the company lifted its full-year revenue guidance to $4.5 billion to $4.8 billion, from the high end of a range between $4 billion and $4.4 billion, which it forecast in late February. The company also raised its expectations for license and royalty revenue for the full-year to a range of 350 million to 375 million. In addition, SanDisk boosted its full year 2010 forecast for non-GAAP total gross margin to a range of 41 to 44%, and for non-GAAP product gross margin to a range of 36% to 39%.
For the second quarter, total revenue is anticipated between 1.1 billion and 1.175 billion. Within total second quarter revenue, it expects license and royalty revenue between 80 million and 90 million, slightly down sequentially since its second quarter royalty revenue reflects the seasonal first quarter revenue of its licensees. It also expects its second quarter sales to reflect more promotional pricing in the retail channel associated with the moms, proms, dads and grad season. Turning to gross margin, it expects a sequential improvement in cost to be less in second quarter than in first quarter due to anticipated higher mix of demand for certain products in our portfolio. It anticipates non-GAAP total gross margin for second quarter between 42% and 45%, and non-GAAP product gross margin between 37% and 40%.
Global demand for flash memory has continued to remain strong, thanks to the introduction of a wide array of new handheld devices. According to market research firm iSuppli, global revenues from shipments of NAND flash memory totaled $4.1 billion in the second quarter of 2010, down slightly from $4.3 billion in the prior quarter. The search research firm expects global NAND revenues to rise by 32% for the entire year of 2010 to reach a record $17.9 billion.
In terms of stock performance, SanDisk shares have gained nearly 40 percent since the beginning of the year.
Disclosure: Author doesn't own any of the stocks discussed here.
