SanDisk Corp. shares dropped in late trading Wednesday after the biggest maker of flash-memory cards gave a first-quarter sales forecast that missed analysts’ estimates, citing lower prices for chips that store data in mobile phones.
Sales in the current period will be $1.3 billion to $1.35 billion, Chief Financial Officer Judy Bruner said on a conference call Wednesday. Milpitas, California-based Sandisk was projected to have sales of $1.46 billion, the average estimate of analysts in a Bloomberg survey. The shares declined as much as 11 percent.
The company said it’s putting the expansion of a plant on hold as prices fall for so-called Nand flash-memory chips, used to store information in portable devices such as Apple Inc.’s iPhone. Production at suppliers like SanDisk and Samsung Electronics Co. has gotten ahead of demand, according to Daniel Berenbaum, an analyst at MKM Partners LP in New York.
Price declines accelerated in the latter part of the fourth quarter, Bruner said on the conference call. That, along with lower orders from some mobile-phone customers, will hurt sales in the first quarter, she said.
For 2012, sales will be $6.2 billion to $6.6 billion, Bruner said. The company sees most of its 2012 revenue growth coming in the second half, she said. Analysts on average projected annual sales of $6.64 billion.
For the fourth quarter, sales rose 19 percent to $1.58 billion, the company said in a statement. Net income was $281.2 million, or $1.14 a share, compared with $485.5 million, or $2.01 a share, a year earlier. Analysts on average estimated earnings of $1.13 a share on sales of $1.58 billion.
Under Chief Executive Officer Sanjay Mehrotra, SanDisk has been trying to win more sales from makers of mobile phones and lessen its reliance on revenue from consumer flash drives and memory cards.
SanDisk shares fell as low as $46.75 in extended trading after the forecast. Before the report, the stock rose 2.3 percent to $52.34 at the close in New York.
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