"SanDisk smashed first-quarter expectations ... as expectations for revenues, gross and operating margins, and opex control were crushed," Caris analyst Craig Ellis said in a note. "Further, second-quarter outlook has less-than-normal conservatism but is not aggressive - a nice balance."

Caris has a buy rating on SanDisk.

On the other hand, Wedbush analyst Betsy Van Hees wrote that while she is "constructive on SanDisk in the near-term given the favorable NAND supply/demand environment... we are concerned to support SanDisk's evolving business model that it will likely have to raise its dependency on competitors for NAND supply in the second half of 2010."

Wedbush maintained its neutral rating.

Auriga analyst Daniel Berenbaum also offered a downbeat view, as he also raised questions on SanDisk's strategy.

He said SanDisk "continues to sell components to its competitors, which seems to be an effort to cost-effectively ensure that SanDisk's NAND sees as much shelf space as possible -- however, this may also create issues for its own-branded cards in the future."

Auriga has a sell rating on the stock.

Earlier in the week, Pacific Crest Securities downgraded SanDisk to underperform, warning the company will likely enter a period of "no growth."

On Wednesday, the company reported a fiscal first-quarter net income of $234.7 million, or 99 cents a share, compared to a loss of $208 million, or 92 cents a share in the same period last year.

The maker of flash memory technology said revenue for the period ended April 4 rose 65% to $1.1 billion.

Excluding special items, SanDisk said earnings for the quarter were 95 cents a share.

Analysts polled by Thomson Reuters had expected SanDisk to post first-quarter earnings excluding items of 59 cents a share, and $985.9 million in revenue.

By: DocMemory
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