SanDisk Profits Plunge After Being Dumped By Apple
Overnight the Company said that that profits would drop by 40%. Their share crashed 19% on the news.
ChannelNews has been told that one of the big problems facing the Company is that Apple has dumped the memory maker for SSD cards in favour of product from Samsung.
As a result of the Apple decision SanDisk whose products in Australia are sometimes double the price of what the same product is selling for in the USA cut its outlook for the current quarter and for the year.
At Harvey Norman a SanDisk 64GB Extreme Pro Card is selling for $278 the same card is being sold at Best Buy in the US for $91.99 (A$117). A 64GB Micro SanDisk SDXC card is selling at Best Buy for $42.99 (A$55.11) at Harvey Norman a 64GB Micro SDX card is retailing for $139.
2015 did not start well for the US Company who back in January flagged problems for the year ahead, now their problems have got worse.
“They’ve had a series of disappointments,” said Ambrish Srivastava, an analyst at BMO Capital Markets.
George Saad, the Director of SanDisk Australia and Indonesia has refused to discuss why SanDisk is charging Australians a premium for their products.
In a call earlier today Saad who normally likes to brag about the prior success of SanDisk and in particular the profits he has been generating from the Australian market is suddenly refusing to comment on the issues that SanDisk are facing.
In January, SanDisk claimed the downturn was due to production issues and “maintenance issues” at production lines in Japan.
Now the Company is spinning another story in an effort to prop up their declines in both sales and profits.
The company is now saying that they have lost a major customer for its solid-state drives, or SSDs, flash-based devices that store data in computers.
While SanDisk didn’t name the company ChannelNews has been told that Apple has dumped SanDisk product for what insiders are claiming is a superior SSD product from Apple arch rival Samsung.
SanDisk said it expects to post revenue of $1.3 billion for the quarter ending March 29, compared with the $1.4 billion to $1.45 billion it had forecast in January.
“We are disappointed with our financial outlook,” said Sanjay Mehrotra, SanDisk’s chief executive, in prepared remarks. “We will work through these headwinds, leveraging our compelling product road map and broadening customer base.”
The company has also said its full-year revenue would be lower than its previous guidance, but it didn’t specify by how much. The company also said it is postponing an investor meeting that had been scheduled for May to an unspecified future date.
In January, the company projected revenue of $6.5 billion to $6.8 billion for the year, compared with analysts’ expectations at the time of $7.23 billion.