SanDisk (NASDAQ:SNDK) shares are down sharply after hours after the company announced strong third quarter results, but revealed an accelerating slide in flash memory pricing.
In the quarter, the company reported revenue of $751million, and pro forma profits of 61 cents a share; the Street had expected revenue of $737 million and 57 cents. No problems there.
But the company also said average price per megabyte sold dropped 25% from the previous quarter and 60% from a year earlier; that’s worse than the second quarter, when prices fell 19% sequentially and 49% year-over-year.
The company’s GAAP operating margins slipped to 17% from 18% in the previous quarter; on a non-GAAP basis, operating margins fell to 21%, from 22%.
The company said it expects 200% growth in megabytes sold for all of 2006. On a sequential basis, SanDisk said megabytes sold increased 40%; in the previous quarter, sequential growth on that basis was 46%.
After hours, SanDisk is off $5.43 at $56.21.