WDC/Sandisk Corporation Message Board

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Technology Stocks : WDC/Sandisk Corporation

WDC 163.00

-0.4%

Nov 7 3:59 PM EST

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To: limtex who wrote (2701)	3/26/1998 2:42:00 PM
From: Bryan V	Read Replies (1) of 60323

limtex - I'll point out what I found significant, which is that SNDK's tax exposure is changing dramatically this year. Read the paragraph Provision for Income Taxes. Sounds to me like SNDK has depleted its remaining tax credits last year and is facing a full tax burden in 1998. I haven't looked at corporate tax rates for 1998 yet, but I recall Fed used to be around 35% and CA is about 9%. Combined they are facing 44%, but I would expect them to scrape some credits or deductions together that would get that down to 40%. Going from a 15% tax rate to what I guesstimate will be around 40% in 1998 is huge. On a projected first quarter taxable income of $6 mil, you will be losing another $1.5 mil. That's around $0.05 per share. My bet at this point says that they will post Q1 earnings per share on the low side of estimates, in the range of .13 - .15, as they crank in the new allowance for taxes. I hope I'm wrong, but if I'm not, then it looks like a great buy opportunity approaching!!

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