SNDK Conference Call Summary
Co says supply and demand imbalances in Q1 will continue into Q2. Co says there were greater than expected price declines in the 2H of the qtr. Co says the demand environment will improve in the 2H of the year and with less capacity being brought on it should improve imbalances. Co is in the process of developing their new imbedded products, they believe these new products will expand their reach to a broader range of handsets, tablets and other devices for both established and emerging markets compared to what they are able to address in the first half of this year. Co notes SSD sales posted solid sequential growth. Revenue is gaining momentum and they expect to launch more products in the 2nd qtr. Growth in client and enterprise SSD revenues remains on track to account for more than a 10% mix of total revenue for the year. Co says retail market share in the developed markets like U.S, Europe and Japan, remains strong. Units sold in the emerging markets more than doubled from last year. Co is disappointed with their Q1 results and sees a sequential decline in revenue in the second qtr, as mentioned earlier the co expects Q2 revs of $950 mln -1.05 bln vs $1.283 bln consensus. The co expects to deliver strong sequential revenue growth in both the third and fourth quarters driven by sales of new embedded products and accelerating growth in SSD sales combined with expectation of an improved pricing environment. However, they expect the full year 2012 revenue will be down from 2011 results (In 2011 the co reported sales of $5.66 bln, current FY12 rev consensus is $5.75 bln). Gross Margins for the full year 2012 are anticipated to be in the upper half of the 25% to 35% range that they have previously shared. The stock is now down ~$3.60 to $36.85 in after market trading following poor rev guidance. (Call is in Q&A) |
