Earlier in the month, SanDisk released a warning for these earnings that had a severe impact on its stock. The company lowered its fourth-quarter revenue guidance as well as gross margin. Weaker-than-expected retail sales and iNAND sales were the primary drivers for the lowered revenue guidance
SanDisk announced that its board of directors authorized a $2.5 billion increase in the company’s existing share repurchase program. With the additional authorization, the company has approximately $3.0 billion remaining available for stock repurchases under the program.
The company also announced that there will also be a first quarter 2015 dividend of $0.30 per share of common stock, payable on March 23, to shareholders as of the close of March 2.
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Sanjay Mehrotra, president and CEO of SanDisk, said:
We delivered record revenue in 2014 with continued progress in shifting our portfolio towards high value solutions. Our SSD solutions reached 29 percent of revenue in 2014, with strong growth from both client and enterprise SSDs. We are disappointed with our fourth quarter results, which were impacted primarily by supply constraints. We believe that NAND flash industry fundamentals are healthy, and we expect our financial results to improve as we move through 2015.
The brokerage firm, Nomura, appears to have taken the warnings seriously and downgraded SanDisk to a Reduce rating from Neutral, as well as lowering its price target to $65 from $70. This call came just a day before earnings were to be reported, and it implies a downside of 17.5% from Tuesday’s close.
Shares of SanDisk closed Wednesday up 2% at $80.44. After the release of the earnings report, shares were up 1% at $81.20 in post-market trading. The stock has a consensus analyst price target of $103.71 and a 52-week trading range of $66.80 to $108.77. The market cap is now about $17 billion.
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