Fusion-io integration hurts chipmaker SanDisk's revenue forecast

Thu Oct 16, 2014 6:47pm EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Soham Chatterjee

(Reuters) - Chipmaker SanDisk Corp forecast current-quarter revenue below analysts' estimates due to lower revenue from Fusion-io Inc, a solid-state storage products maker it acquired in June.

SanDisk's shares fell 5 percent in extended trading, after the company also reported lower-than-expected revenue for the third quarter.

SanDisk, a supplier of memory chips for Apple Inc's iPhones, bought Fusion-io to enter the high-margin solid-state drives (SSDs) business.

The company has been increasing its focus on the fast-growing SSD business also to offset the impact of volatility in prices of memory chips due to excess capacity.

Rival Samsung Electronics Co Ltd said last week that it would spend $15 billion to build a major new factory in South Korea to make either memory chips or logic chips.

SanDisk forecast revenue of $1.80 billion-$1.85 billion for the fourth quarter ending December. Analysts on average were expecting $1.88 billion, according to Thomson Reuters I/B/E/S.

"Fusion-io revenue was down sequentially from the prior run rate ... We expect that (Fusion-io revenue) would be down sequentially (in current quarter) ... due to the integration of the business and the sales force," SanDisk's Chief Financial Officer Judy Bruner said on a conference call.

The company's net income fell 5 percent to $262.7 million, or $1.09 per share, in the third quarter ended Sept. 28 as expenses rose 9 percent, mainly due to costs related to restructuring and the acquisition of Fusion-io.   Continued...

 
Sandisk's new solid state drive is displayed at the Sandisk booth during the 2014 Computex exhibition at the TWTC Nangang exhibition hall in Taipei June 3, 2014.  REUTERS/Pichi Chuang