Company Update (NASDAQ:SNDK): SanDisk Corporation Announces Fourth Quarter and Fiscal 2015 Results


SanDisk Corporation (NASDAQ:SNDK), a global leader in flash storage solutions, announced results for the fourth quarter and fiscal 2015 ended January 3, 2016. Fourth quarter revenue of $1.54 billion decreased 11 percent on a year-over-year basis and increased 6 percent sequentially. Annual revenue for 2015 was $5.56 billion, a decrease of 16 percent from 2014.

On a GAAP(1) basis, fourth quarter net income was $135 million, or $0.65 per share, compared to net income of $202 million, or $0.86 per share, in the fourth quarter of 2014 and net income of $133 million, or $0.65 per share, in the third quarter of 2015. Annual net income for 2015 was $388 million, or $1.82 per share, compared to $1.01 billion, or $4.23 per share, in 2014.

On a non-GAAP(2)(3) basis, fourth quarter net income was $257 million, or $1.26 per share, compared to net income of $294 million, or $1.30 per share, in the fourth quarter of 2014 and net income of $223 million, or $1.09 per share, in the third quarter of 2015. Annual net income for 2015 was $750 million, or $3.61 per share, compared to $1.29 billion, or $5.60 per share, in 2014. For a reconciliation of non-GAAP to GAAP results, see accompanying financial tables and footnotes.

“I am pleased to report an excellent fourth quarter finish to 2015 driven by strong performance in enterprise and retail,” said Sanjay Mehrotra, president and chief executive officer, SanDisk. “We made substantial progress in the second half of 2015 in reinvigorating our portfolio, improving our product execution and expanding our customer engagements. We also achieved an important milestone in beginning our multi-year conversion to 3D NAND, with first retail product shipments and initial OEM customer sampling in the fourth quarter.”

QUARTERLY KEY FINANCIAL RESULTS

(in millions, except percentages
and per share amounts)
  GAAP (1)     Non-GAAP (2)
  Q4’15   Q4’14   Q3’15     Q4’15   Q4’14   Q3’15
Revenue   $1,543   $1,735   $1,452     $1,543   $1,735   $1,452
Gross profit   $625   $740   $603     $658   $780   $637
percent of revenue   41%   43%   42%     43%   45%   44%
Operating income   $218   $328   $237     $333   $419   $321
percent of revenue   14%   19%   16%     22%   24%   22%
EPS (3)   $0.65   $0.86   $0.65     $1.26   $1.30   $1.09
                           

ANNUAL KEY FINANCIAL RESULTS

    GAAP(1)     Non-GAAP(2)
(in millions, except percentages
and per share amounts)
  FY’15   FY’14     FY’15   FY’14
Revenue   $5,565   $6,628     $5,565   $6,628
Gross profit   $2,257   $3,068     $2,388   $3,191
percent of revenue   41%   46%     43%   48%
Operating income   $617   $1,558     $1,043   $1,848
percent of revenue   11%   24%     19%   28%
EPS(3)   $1.82   $4.23     $3.61   $5.60
                   

OTHER FINANCIAL INFORMATION

(in millions)   Q4’15   Q4’14   Q3’15
Cash, cash equivalents, short and long-term marketable securities   $ 4,123     $ 5,023     $ 3,875  
Less aggregate principal amount of convertible senior notes outstanding     (2,497 )     (2,497 )     (2,497 )
Net cash (4)   $ 1,626     $ 2,526     $ 1,378  
Net cash provided by operating activities   $ 434     $ 488     $ 275  
Less acquisition of property and equipment, net     (131 )     (67 )     (89 )
Change in investment and notes receivable activity with Flash Ventures     (27 )     55       (16 )
Free cash flow (5) $ 276 $ 476 $ 171

NEWS HIGHLIGHTS

  • SanDisk announced two ecosystem partnerships that leverage the SanDisk InfiniFlash™ System; one with Super Micro Computer, Inc. and Nexenta Systems, Inc. and another with Quanta Cloud Technology.
  • At the Las Vegas Consumer Electronics Show (CES), SanDisk launched the SanDisk X400® client SSD, a 15-nanometer X3-based SSD which is the world’s thinnest one-terabyte M.2 SSD and the industry’s first single-sided one-terabyte SATA M.2 form factor with a mere 1.5mm height.
  • Also at CES, SanDisk introduced new retail products including the SanDisk Extreme® 510 Portable SSD, a high-performance “all-terrain” portable SSD which is both durable and water-resistant, as well as the 200 gigabyte (GB) SanDisk Connect™ Wireless Stick and the 128GB SanDisk Ultra® Dual USB Drive 3.0.(Original Source)

Shares of SanDisk are up 1.25% to $65.00 in after-hours trading. SNDK has a 1-year high of $87.43 and a 1-year low of $44.28. The stock’s 50-day moving average is $73.41 and its 200-day moving average is $65.52.

On the ratings front, SanDisk has been the subject of a number of recent research reports. In a report issued on January 25, CLSA analyst Mark Heller downgraded SNDK to Sell, with a price target of $70, which implies an upside of 9.0% from current levels. Separately, on November 11, Bernstein Research’s Mark Newman downgraded the stock to Hold and has a price target of $86.50.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Mark Heller and Mark Newman have a total average return of -4.2% and 11.3% respectively. Heller has a success rate of 61.9% and is ranked #2636 out of 3607 analysts, while Newman has a success rate of 50.0% and is ranked #533.

SanDisk Corp designs, develops and manufactures data storage solutions using flash memory, proprietary controller and firmware technologies.