Tuesday, January 31, 2006
The value of shares in SanDisk Corp., a supplier of memory card products, and a leading customer for flash memory, fell by more than 10 percent on Friday after Eli Harari, chief executive officer, said in a financial results statement that the company expected a soft first quarter and would cut its prices to maintain demand and market share.
The shares in SanDisk (Sunnyvale, Calif.) opened Friday at above $70 each and closed below $64 to lose more than 10 percent.
Although SanDisk’s financial results were at record levels and Harari spoke of a good year to come the market picked up on the negative short-term sentiment. SanDisk made fourth quarter net income of $134 million on revenues of $751 million.
“We are optimistic about our business outlook and our competitiveness in 2006 and expect this to be a year of continuing strong growth in demand in our target markets as well as a competitive landscape that is characteristic of rapidly growing consumer mass–markets,” Harari said, in the statement.
Harari continued: “We expect a seasonally soft first quarter in retail partially offset by continuing strength in our OEM handset business. To stimulate demand and accelerate consumers’ move to gigabyte capacities in 2006, we are taking significant pricing actions in the first quarter that are made possible for us through the significantly lower costs achieved as we ramp production at the Flash Partners’ Fab 3 and as we continue to increase output of our 8-Gbit chip.”
Those price actions would comprise cuts of between 25 percent and 35 percent, according to reports.
By: DocMemory
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