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SanDisk Sees Q3 Surge

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

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.