SanDisk: Fiscal 1Q14 Financial Results

(in $ million)	1Q13	1Q14
Revenue	1,341	1,512
Growth		*13%*
Net income (loss)	166.2	268.9

SanDisk Corporation announced results for the first quarter ended March 30, 2014.

First quarter revenue of $1.51 billion increased 13% on a year-over-year basis and decreased 12% sequentially.

On a GAAP basis, first quarter net income was $269 million, or $1.14 per diluted share, compared to net income of $166 million, or $0.68 per diluted share, in the first quarter of fiscal 2013 and $338 million, or $1.45 per diluted share, in the fourth quarter of fiscal 2013.

On a non-GAAP basis, first quarter net income was $330 million, or $1.44 per diluted share, compared to net income of $207 million, or $0.84 per diluted share, in the first quarter of fiscal 2013 and net income of $390 million, or $1.71 per diluted share, in the fourth quarter of fiscal 2013.

“We delivered record first quarter results, driven by 61% growth in our SSD revenue and strong retail performance,” said Sanjay Mehrotra, president and CEO, SanDisk. “We are excited by the momentum we are building in our business as we continue to execute on our growth initiatives.“

Highlights
SanDisk announced its second quarter 2014 dividend of $0.225 per share of common stock, payable on May 27, 2014 to shareholders of record as of the close of business on May 5, 2014.

The company recently introduced products in three categories:

CloudSpeed Extreme, CloudSpeed Ultra, CloudSpeed Ascend and CloudSpeed Eco enterprise SATA SSDs for data center and cloud computing storage solutions at unit capacities ranging from 100GB to 960GB
High performance iNAND Extreme embedded flash storage at capacities up to 64GB for Android based mobile devices
128GB SanDisk Ultra microSDXC UHS-1 card, the world’s highest capacity mobile offering

Comments

Sanjay Mehrotra, president and CEO:
"Combined client and enterprise SSD sales accounted for 28% of our first quarter revenue with enterprise SSD revenue, more than doubling on year-over-year basis.
"We expect our enterprise SATA SSDs to be a strong contributor to our enterprise revenue growth in 2014.
"We have started customer qualification of our 1Y nanometer based client SSDs at many OEMs and we are making good progress on that front.
"We anticipate that enterprise SSDs will be our fastest growing product category in 2014 and we are off to a great start towards exceeding our goal of delivering 25% of 2014 revenue from enterprise and client SSDs combined.
"Turning to technology and Fab operations, our 1Y technology continues to ramp well and we expect to achieve more than half of our bit supply output on 1Y in the second quarter.
"From a wafer Fab perspective, the shell for phase 2 of Fab 5 is on track to be completed in mid-2014.
"For 2014 SanDisk supply bit growth estimates remain unchanged between 25% and 35% and our estimates for industry supply bit growth of approximately 40% for 2014 remains unchanged as well."

Judy Bruner, CFO:
"Our overall SSD sales in Q1 grew by 61% year-over-year, reaching 28% of our total Q1 revenue.
"Q1 revenue bits grew 20% year-over-year and declined 10% sequentially.
"Our blended cost per gigabyte improved 3% sequentially and 23% year-over-year. Our blended average selling price per gigabyte declined 3% sequentially and 7% year-over-year benefiting from our ongoing strong portfolio mix shift.
"Our second quarter revenue forecast is $1,550 million to $1,625 million and our full-year revenue forecast remains unchanged at $6.4 billion to $6.8 billion. In terms of product mix across the rest of 2014, we expect the strongest growth from both embedded solutions and enterprise SSD. We expect that our embedded sales mix will gain relative to SSD mix as our iNAND solutions continue to gain momentum, and with some expected shift in demand mix from the previously mentioned major customer towards custom embedded solutions."