SanDisk (SNDK) is expected to report Q1 earnings after the market close on Thursday, April 19, with a conference call scheduled for 5:00 pm ET.
The consensus estimate is 70c for EPS and $1.23B for revenue, according to First Call. After reporting mixed Q4 results back in January, SanDisk primed investors for bad news by lowering its outlook for Q1 -- owing to demand uncertainty from the smartphone makers and the somewhat higher rate of market price declines seen in late Q4 and early Q1. On April 3, SanDisk lowered its Q1 revenue guidance to approximately $1.2B, down from prior $1.3B-$1.35B view. Total gross margin is also expected to be below the previously guided range of 39%-42%. SanDisk also announced at its analyst day that it expects contribution from the SSD business to grow roughly 14.0% in 2014. The acquisition of FlashSoft and the licensing agreement with Diskeeper highlights SanDisk's commitment to further expand in the SSD segment. Management did say on its last earnings call that 2012 will be the "inflection point" of SSD growth. That enterprise and client markets will become strong contributors to revenue growth in 2012 and beyond. The company said enterprise and client markets will become strong contributors to revenue growth in 2012 and beyond. SanDisk forecasted FY12 revenue of $6.2B-$6.6B -- seeing most of the FY12 revenue growth in the 2H.
FY12 capex was pegged at $1.1B-$1.6B. Although SanDisk negatively pre-announced, Wedbush thinks Street estimates for Q1 earnings and Q2 outlook remain too high. SanDisk strength of late has been attributed to renewed takeover speculation. RBC Capital has break-up value of $68-$83 on the company.