October 17, 2014 / 2:59 AM / 3 years ago

Chipmaker SanDisk forecasts lower revenue

(Reuters) - Chipmaker SanDisk Corp forecasts current-quarter revenue below analysts’ estimates due to supply constraints.

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

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, in June bought Fusion-io Inc, a solid-state storage products maker.

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.

The company’s GAAP net income fell 5 percent to $262.7 million, or $1.09 per share, in the third quarter ended Sept. 28 as expenses rose 25 percent from the prior quarter, mainly due to costs related to restructuring and the acquisition of Fusion-io.

Excluding the restructuring items and other non-cash items, SanDisk earned $1.45 per share.

Revenue rose 7 percent to $1.75 billion.

Analysts on average had expected a profit of $1.33 per share and revenue of $1.77 billion.

The revenue miss “is a bit of negative surprise given how strong the launch of the Apple’s next gen iPhones have been and the addition of recent acquisition Fusion IO,” Wedbush Securities analyst Betsy Van Hees told Reuters.

SanDisk also said it would pay a quarterly dividend of 30 cents per share.

The company’s shares closed at $85.31 on the Nasdaq on Thursday. Up to Thursday’s close, the stock had risen 21 percent this year.

(This story corrects the headline and story to remove references to Fusion-io integration hurting revenue. It corrects rise in expenses to 25 percent, not 9 percent.)

Editing by Kirti Pandey

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