Thursday, October 16, 2003
Q3 may have been good to SanDisk Corp., but its legal representation has not.
While the company announced revenue of $281 million, a 99 percent year-over-year and 20 percent sequential growth; net income of $51 million, up from $11.3 million in Q3 2002 and $41.3 million in Q2; and a 275 percent year-over-year jump in its earnings per share of 60 cents, SanDisk today admitted that one of its law firm's attorneys had fraudulently sold and misappropriated the proceeds from shares of SanDisk's United Microelectronics Corp. stock.
Late in Q3, the flash player sold 35 million UMC shares that generated net proceeds of approximately $30 million, $17 million of which is included in its quarter-end cash holdings and $13 million in other current assets. SanDisk said it was advised late Tuesday by its Taiwanese law firm, Lee and Li, that one of Lee and Li's attorneys had made the unrelated and unauthorized sale with the stock held by the firm on behalf of SanDisk pursuant to a power of attorney.
With that, SanDisk said its Q3 financial results do not account for the theft and that it could not determine the amount of loss, if any, immediately. Any amount that is not fully repaid may result in non-operating accounting charges in the periods corresponding to the dates of the fraudulent sales, the company concluded.
Still, the bad news isn't hurting SanDisk's standing, as its stock jumped more than 4 percent in the afternoon's trading. The company itself remained upbeat and forecasted a strong Q4 based on consumer sales. SanDisk also raised its full-year expectations from $950 million to $1 billion.
By: DocMemory
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