SanDisk shares slide on Q2 warning
NEW YORK, June 19 (Reuters) - SanDisk Corp shares fell 23 percent in early trading on Tuesday after the company warned of disappointing second quarter earnings.
Shares of the company, which makes flash memory data storage products, were down 3-3/4 to 12-1/2 in the first few minutes of trading on the Nasdaq.
The slide came on top of Thursday's losses, when the stock dropped 2-3/4 to 16-1/4 ahead of the announcement.
The Sunnyvale, Calif., company said late Thursday that second-quarter profits would be ''marginally positive'' as revenues and product margins fell from first quarter levels.
Wall Street had forecast the company would earn about $0.19 a share in the second quarter, according to investment research firm First Call. SanDisk is to report second quarter results on July 15.
SanDisk blamed lower selling prices, royalties and license fees stemming from the recession in Japan for its disappointing forecast. Also hurting its bottom line was a change in its Japanese sales model, delays in introducing digital cameras that use SanDisk memory products in the United States and Japan, and sales strength of digital cameras that do not use flash cards.
SanDisk said it would take an unspecified inventory write-down.
H.C. Wainwright & Co. Inc. analyst Eric Ross downgraded SanDisk to hold from buy after the warning. He slashed earnings estimates by nearly half, to $0.46 a share from $0.95 for fiscal 1998, and to $0.67 from $1.18 for 1999. Ross estimated the inventory write-down would be more than $4 million. |
