Feeds

Cheap flash sinks SanDisk's profits

Misty margin-filled memories

Next gen security for virtualised datacentres

SanDisk's second quarter profits sunk 71 per cent as the #1 flash memory manufacturer suffered through declining prices, but promised market stabilization is in the cards.

Q2 income floundered at $28.5m during the quarter, a far reach from the $95.6m the company earned during the same period last year. According to SanDisk, the average price per megabyte sold declined 65 per cent from last year.

The company's revenue increased 15 per cent year-over-year, reaching $827m compared to $719m in Q2 '06.

License and royalty revenue for the quarter was $107m, up 30 per cent year-over-year.

“Product gross margins stabilized despite substantial price reductions in the second quarter," said SanDisk CEO Eli Harari. "We expect product gross margins to improve gradually in the second half of the year, driven by more moderate price declines resulting from an expected improvement in the balance between demand and supply, declining manufacturing costs and strength in our income from royalties."

The company expects to turn their profits around in the second half of 2007 and in 2008 with the bombardment of new flash memory-ready consumer electronics entering the market.

Harari's confidence sent SanDisk stock up nearly 6 per cent to over $3 a share in after-hours trading.

For the company's third quarter, they expect revenue in the range of $750m to $825m. License and royalty revenue is forecast between $105m and $115m.

While gross margins in the second quarter were at 16.2 per cent, Harari expects them to land between 17 and 21 per cent in the third quarter. ®

The essential guide to IT transformation

More from The Register

next story
The Return of BSOD: Does ANYONE trust Microsoft patches?
Sysadmins, you're either fighting fires or seen as incompetents now
Microsoft: Azure isn't ready for biz-critical apps … yet
Microsoft will move its own IT to the cloud to avoid $200m server bill
Oracle reveals 32-core, 10 BEEELLION-transistor SPARC M7
New chip scales to 1024 cores, 8192 threads 64 TB RAM, at speeds over 3.6GHz
US regulators OK sale of IBM's x86 server biz to Lenovo
Now all that remains is for gov't offices to ban the boxes
Object storage bods Exablox: RAID is dead, baby. RAID is dead
Bring your own disks to its object appliances
Nimble's latest mutants GORGE themselves on unlucky forerunners
Crossing Sandy Bridges without stopping for breath
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
7 Elements of Radically Simple OS Migration
Avoid the typical headaches of OS migration during your next project by learning about 7 elements of radically simple OS migration.
BYOD's dark side: Data protection
An endpoint data protection solution that adds value to the user and the organization so it can protect itself from data loss as well as leverage corporate data.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?