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SanDisk Made Money… Can It Be? (SNDK)

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By Douglas A. McIntyre Updated Published
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Flash memory giant SanDisk Corp. (NASDAQ: SNDK) posted a surprise profit.  Earnings were $52.5 million, or $0.23 EPS, but its non-GAAP earnings were $0.36 EPS.  That compares to a loss of $73.75 million a year ago.  Revenues came in down almost 10% at $730.5 million from $816 million a year ago.  Thomson Reuters had the non-GAAP consensus as a loss of -$0.16 EPS and $709.69 million in revenues.  It is almost hard to believe after so much weakness has become the norm, but the company noted increased pricing, higher royalty revenue, and strong execution.

Licensing and royalty revenue grew by almost 68% sequentially to $120 million.  Year-over-year that figure is still down by 7%.  The company has more market certainty on its renewed patent cross licensing pact with Samsung for another seven years.  Another note from management is that the company is “cautiously optimistic about the second half of 2009.”

Without any formal guidance until after the conference call we are considering this an unfinished story.  Either way, earnings have been bad for so long at SanDisk that this almost seems like a dream.  Shares closed up over 4% at $18.99 today, and the after-hours trading has shares around $19.00.  The 52-week range is $5.07 to $23.50.

UPDATED AT 5:24 PM EST: In the conference call, SanDisk has guided the coming quarter to $725 million to $775 million in revenues, with $110 million to $115 million in licensing and royalty revenues.  Thomson Reuters has estimates pegged at $776 million, so that mid-point is far under the real consensus estimate.  Shares are now down 6% at $17.75 in the after-hours session.

JON C. OGG

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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