Lexar CEO On Flash Memory In Mobile Handsets, MP3 Players (LEXR 3Q05 Conf Call Quotes)

Flash memory maker Lexar (ticker: LEXR) joined rival Sandisk in reporting 3Q05 earnings that beat analyst estimates. Lexar also announced renewal of a supply and licensing agreement with Samsung that the company claims will lessen any NAND supply difficulties that have been known to plague this sector. But lower than expected revenue guidance for 4Q is curbing investor enthusiasm -- LEXR is up only 2% after hours. Key data on the quarter and excerpts from the conference call:

Earnings: $2.4 million, or 3 cents/share (3Q04: Loss of $3.52 million or 4 cents/share)

Revenue: $189.4 million (3Q04: $165.2 million)

Geographic revenue split: 62% from North America; 13% from Europe; and 25% from Japan and rest of the world

Revenue guidance for 4Q05: $220 million

Lexar CEO Eric Stang commented on the growth of flash memory in mobile handset and MP3 markets:

That [mobile phone] market … really hasn’t developed very quickly. Particularly here in North America it’s a very small market opportunity still… it is going to begin to develop next year. The year after next year I think could be quite significant. I am very excited about the trends towards music playback as well as photography creating a need for significant storage in mobile phones. We think it is time now to begin to try and capitalize that from a retail perspective… the sheer volume of the mobile space means it can be enormous…

We are always looking at how we can participate in the MP3 space most effectively…We think there has been an oversupply in that market now that Apple has entered so strongly… more and more you can’t just talk about cards as cards. You have to talk about them from the point of view of photography or mobile or gaming or other potential segments you may see them… flash drives are not just dumb storage. They are going to be more and more application orientations to flash drives.

(Quotes are from the CCBN StreetEvents transcript.)

Related:

• Sandisk Revenue, Earnings Surprise to Upside (SNDK 3Q05 Conf Call Quotes)
• The Flash-makers’ Conundrum (SanDisk, SNDK)
• Will Disney’s Kids MP3 Player Threaten Apple? (DIS, AAPL, SNDK, LEXR)
• List of all stocks covered by The Consumer Electronics Stock Blog (and links to articles about them)