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SanDisk Sees Q3 Surge

10/22/2010 10:53:20 AM Eastern
Milpitas, Calif. - SanDisk reported a 39 percent leap in profit in the third quarter as sales surged.

The memory and storage supplier reported a Q3 profit of $322.1 million, compared with a profit of $231.3 million for the year-earlier period. Revenue was $1.23 billion, up from $935.2 million.

On his last quarterly conference call with investors before his retirement at year's end, CEO Eli Harari cited "stable pricing and substantial cost reductions" as drivers to the positive results, which exceeded analyst's expectation and drove the company's stock price up 9 percent.

"For 2011, we are bullish about continuing growth in our diversified channels, including further substantial inroads for our embedded storage products in smart phones, tablet PCs and other mobile devices," Harari added.

Chief financial officer Judy Bruner reported overall revenue growth of 32 percent year over year and operating margins of 35 percent on a GAAP basis. She said product revenue for the third quarter shifted a bit toward retail, with a mix of 62 percent OEM business and 38 percent retail.

Average selling price per gigabyte declined 5 percent, while gigabytes sold in Q3 grew 71 percent year over year and 84 percent on a year-to-date basis. Overall retail revenue was up 20 percent year over year.

Bruner said retail channels delivered sequential unit and revenue growth in all key end markets, including mobile, imaging, USB, audio/video and gaming, with the strongest retail growth coming from USB for back-to-school and from mobile products.

Across all channels, Q3 revenue by end market came 50 percent from the mobile market, 22 percent from imaging, 10 percent from USBs, 10 percent from other product markets, and 8 percent from license and royalty revenue, Bruner reported.
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