SanDisk Reports Healthy Fourth Quarter

By MICHELLE PASQUERELLO
Associate Editor, TMCnet Online Channels

 

Flash storage card supplier SanDisk reported a healthy fourth quarter, thanks to sturdy sales of handsets and flash mp3 players.

 

According to the release, the results of fourth quarter revenues demonstrated a 37 percent increase on a year-over-year basis to a record $751 million and increased 27 percent compared to the third quarter of 2005. 

 

Highlights from the financial results are as follows:

 

- Product revenue was a record $683 million in the fourth quarter, up 35% year-over-year and 29% sequentially.

- Revenue from license and royalties was $67 million, up 63% year-over-year and 12% sequentially.   

- Product gross margin was 34.4% compared to 32.0% in the fourth quarter of 2004 and 37.2% in the third quarter of 2005.  Product gross margin in 2005 was 35.5% compared to 31.9% in 2004. 

- In the fourth quarter, one quarter ahead of our previous forecast, Fab 3 300 millimeter 4 gigabit NAND/MLC 90 nanometer production achieved lower die cost than the corresponding 4 gigabit die manufactured in high volumes on our mature 200 millimeter production line.

- Operating income was a record $198 million and 26% of revenue compared to $126 million and 23% of revenue in the fourth quarter of 2004 and $159 million and 27% of revenue in the third quarter of 2005.  Operating income for 2005 was $577 million and 25% of revenue, up from $419 million and 24% of revenue in 2004.  

 

“The fourth quarter was a strong finish to a great year for SanDisk.  We sold approximately 11 million mobile cards primarily into OEM bundles in camera-phones and music–centric phones, and we are seeing exceptionally broad acceptance of our microSD™ format in new handsets from the top tier OEMs.  We sold more than a million Flash MP3 players in the fourth quarter, gaining a clear number two share in the highly competitive U.S. retail market, indicative of the growing recognition among consumers of the SanDisk brand, and driven by our strong retail sales organization, which surpassed the 150,000 storefront milestone during the quarter,” said Eli Harari, SanDisk CEO.

 

Total revenue for fiscal 2005 was $2.3 billion, up 30% from $1.8 billion in 2004. Net income was $386 million, up 45% from net income of $267 million in 2004. 

 

SanDisk’s fourth quarter 2005 conference call will be Web cast by CCBN and can be accessed live, and throughout the quarter, at SanDisk’s website at www.sandisk.com/IR