SanDisk Beats Consensus On Revenue, EPS As Removable Storage Sales Rebound

SNDK: SanDisk logo

SanDisk (NASDAQ:SNDK) recently announced its Q1 earnings, reporting a 3% annual growth in revenue to just under $1.4 billion. SanDisk’s revenue and EPS figures were significantly higher than the consensus levels as shown in the table below. [1]

Q1-16_Earn Res 1SanDisk witnessed a slowdown in demand from its embedded storage product sales, which fell by about 34% y-o-y to $219 million. The use of embedded storage products in portable devices such as smartphones and tablets is increasingly switching over to solid state drive storage, leading to low embedded storage sales. On the other hand, removable storage sales rebounded after a weak 2015. Removable storage could continue to gain traction with new product launches such as flash drives for Apple products and removable storage compatible with GoPro cameras driving growth. [2] [3]

Q1-16_Earn Res 2

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The revenue contributions of SanDisk’s two largest divisions through the quarter were roughly in line with our full year forecast for the company. An unexpectedly low contribution from embedded storage products led segment revenue to fall significantly for the flash-storage operator.

Q1-16_Earn Res 3

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 Q3’15, Q4’15 and Q1’16. The deal likely to go through by the end of the June quarter.

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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
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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  1. SanDisk 8-K Filings, SEC, April 2016 []
  2. SanDisk Unveils First microSD™ Card Verified in “Works with GoPro” Program, SanDisk Press Release, March 2016 []
  3. SanDisk Reinvents Its Flash Drive for iPhone and iPad, SanDisk Press Release, April 2016 []