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SanDisk Corp. delivered well above forecast financial results in the third quarter with net income more than tripling from the prior year and sales rising on a double-digit clip on surging demand for the company’s flash storage products at both retail and OEM customers.
The company delivered results that clearly exceeded analysts’ average forecast and sees the positive performance continuing in the current quarter, boosted by strong demand from enterprise customers and consumers in addition to benefits from a recent acquisition.
SanDisk reported net income rose on a Generally Accepted Accounting Principles (GAAP) basis to $276.9 million, or $1.18 per share, in the quarter ended Sept. 29, rising 262 percent, from $76.5 million, or 31 cents per share, in the third quarter of 2012. Revenue increased 28 percent, to $1.63 billion, compared with $1.27 billion in the year ago quarter and beating analysts’ consensus estimate of $1.57 billion.
The strong results were due to rising demand for SanDisk’s flash storage products as well as improving market fundamentals that led to firmer average selling prices, according to president and CEO Sanjay Mehrotra. On a non-GAAP basis, SanDisk said its profits for the September quarter rose to $370.7 million, or $1.59 per share, compared with $117.8 million, or 48 cents per share, in the comparable 2012 quarter. Analysts estimated the company’s non-GAAP earnings per share would be approximately $1.32.
“We delivered outstanding third quarter results driven by our strategy to shift to higher value solutions across our portfolio,” said Mehrotra in a statement. “Our client and enterprise SSD products continue to gain momentum and our acquisition of SMART Storage Systems expands our presence in enterprise SSDs. With our solid execution, we also delivered strong year over year growth in retail and embedded products.”
SanDisk said it spent $1.07 billion on repurchasing stocks during the recent quarter and plans to pay investors $0.225 per share in November, marking the company’s second dividend payment in its history. SanDisk paid its first dividend in July.
The company’s stock price surged in after-market trading on the news, rising more than 2 percent to a new 52-week high of $64.35 and boosting the market capitalization to its highest level in more than 5 years.
