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Thursday, April 17, 2008

Sandisk (SNDK) 1Q:2008 conference call and Q2 guidance

They're guiding total revenues to 875-950mm, about a midpoint of $920mm. The street is at 903mm. They're forecasting price declines for the full year at the high end of their prior estimate -- about 55%. They say non-gaap product gross margins will be 14-18%, which is far below models. They say the strong yen may impede their ability to hit their prior gross margin guidance of 24-28% -- ie: costs from Japan (Toshiba JV) will hammer margins.

The only good thing you can say here is next quarter could be a low point... but numbers are going lower near-term and I don't see what drives retail pricing higher. I do see that raw NAND prices are setting them up for more disappointment. They're saying second half will be better. It better be, it's modeled that way.

I still don't like this stock here. I think it belongs in the low 20s. I prefer Micron, which benefits from rising NAND prices.

2 comments:

squirrel said...

Oh look, another crappy consumer semiconductor company with dreams of the 2nd half! How I wish I were just half as good as the second half always seems to be going to be....

Roy Howard said...

Every year semis have a better second half. It's the seasonal build. It's a total non-comment on the state of business.

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