SanDisk Earnings Preview: SSD Sales To Continue To Drive Results

by Trefis Team
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SanDisk (NASDAQ:SNDK) is scheduled to announced its Q1’16 earnings on Wednesday, April 27th. The company reported a sustained period of weakness in product revenues through 2015, with a 16% decline in revenues to $5.6 billion. At the end of Q3 last year, SanDisk announced that hard drive manufacturer Western Digital (NASDAQ:WDC) will acquire the company for $19 billion. Consequently, the company did not hold its earnings call for Q3 and Q4, with the deal likely to go through by the end of the June quarter. Below are some of our forecasts for SanDisk’s revenue and EPS. Please note that we estimate figures for the full year only.

Q1-16_Earnings4SanDisk is likely to witness revenue growth from its SSD division while all other revenue streams could continue to decline. The slowdown in demand for external removable storage memory cards and flash drives due to an increase in cloud storage and it is likely to continue to drive revenue decline in the removable storage division. On the other hand, the use of embedded storage products in portable devices such as smartphones and tablets is increasingly switching over to solid state drive storage.

Q1-16_Earnings3As a result, the contribution of removable storage and embedded storage to SanDisk’s net revenue through the year is likely to go down to under 38% and 22%, respectively. Comparatively, the contribution of SSD revenue to SanDisk’s net revenues is likely to go up to almost 29% from 24% in 2015.

Q1-16_Earnings2Have more questions about SanDisk? See the links below:

Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for SanDisk

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