Sandisk (SNDK) dropped during the regular session in a way that suggests Wall St. did not want to see its earnings. Shares fell 2% to $55.96. But,, the naysayers were wrong. Second quarter revenue increased 15% on a year-over-year basis to $827 million and net income. Net was $28 million, or $0.12 per diluted share, compared to GAAP net income of $96 million, or $0.47 per diluted share, in the second quarter of 2006.
Investors expected $0.15 EPS on revenues of nearly $793 million, according to First Call.
The company’s CEO said: "Product gross margins stabilized despite substantial price reductions in the second quarter. We expect product gross margins to improve gradually in the second half of the year, driven by more moderate price declines." And added: The flurry of new Flash memory enabled, highly innovative consumer and mobile products coming from our customers, our competitors, and ourselves, we believe, will fuel strong demand for our products in the second half of 2007 and in 2008."
The market cheered and shares rose more than 5% at 4.14 New York time.
Douglas A. McIntyre
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