SanDisk shares jump on 2Q beat

AP News
Posted: Jul 20, 2012 2:28 PM
SanDisk shares jump on 2Q beat

Hope for a pickup in demand for SanDisk Corp. memory chips propelled the company's shares Friday.

THE SPARK: The memory chip maker reported Thursday that its second-quarter net income sank 95 percent and revenue fell 25 percent as it sold fewer memory chips to mobile device makers. But results still edged past expectations of analysts polled by FactSet.

SanDisk said its expanding product offerings and stronger demand for flash memory are expected to boost its financial results in the second half of the year.

The company expects revenue between $1.15 billion and $1.25 billion in the current quarter, versus analyst forecasts of $1.22 billion.

THE BIG PICTURE: SanDisk, based in Milpitas, Calif., makes flash memory chips used in removable USB flash drives and digital media players, solid state drives used in computers and other high-tech chips. Its products are used in electronics including phones, cameras and computers.

The company said Thursday that it expects new smartphones, tablets and other products to increase demand for its flash products.

THE ANALYSIS : Caris analyst Craig Ellis upgraded his rating on the company's shares to "above average" from "average." He said the company is well-positioned for future growth as many newer technology products will use products such as those SanDisk makes.

Ellis increased his price target to $45 from $38.

SHARE ACTION: Shares increased $4.35, or 12 percent, to $39.43 in early afternoon trading. Its shares have traded between $30.99 and $53.46 in the past 52 weeks.