Analyst Goes More Conservative Ahead of SanDisk Earnings (SNDK)

SanDisk Corp. (NASDAQ: SNDK) reports earnings after today’s close and estimates from First Call are $0.64 EPS on $1.27 Billion in revenues.

Interestingly enough, American Technology Research analyst Doug Freedman has just made a more conservative call ahead of today’s results.  Freedman is maintaining his BUY rating, but he is lowering his target to $40 and is lowering estimates for Q4 2007 and for 2008. 

This call reflects more aggressive ASP erosion than anticipated and lower shipment densities.  The call also notes that Apple’s (NASDAQ: AAPL) lack of a new product introduction at MacWorld that pushes NAND density higher is a negative.  AmTech also noted they are hearing of NAND equipment order push-outs and there is a belief of a NAND oversupply for the first half of 2008.  This also notes that Q4 pricing was materially below what was an already lowered guidance.  AmTech lowered the estimates quite a bit:

• December quarter revenue and EPS estimates from $1.445 Billion and $0.69 to $1.259 Billion and $0.49;
• Lowered 2008 revenue and EPS estimate to $5.092B and $1.79 from $6.085B and $2.45 (while consensus estimates are $4.88 Billion in revenues and $2.36 EPS.

This cut won’t change consensus estimates that much as there are over 15 analysts making predictions, but it might lower a bar that should have already been expected to be low.  SanDisk shares are down over 2% after the open at $24.99, and the 52-week trading range is $24.29 to $59.75.

Jon C. Ogg
January 28, 2008