SanDisk Corp. (NASDAQ: SNDK) will close out 2014 when it reports its fourth-quarter results following the close of Wednesday’s trading. Thomson Reuters has consensus estimates of $1.27 in earnings per share and $1.73 billion in revenue. In the previous year, it reported $1.71 in earnings per share and $1.73 billion in revenue.
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Earlier in the month, SanDisk released a warning for these earnings that has a severe impact on its stock. It is worth noting that the stock was closing in on a 52-week high just over a month ago, and it seems that SanDisk could not keep up this pace forever and as a result has pumped the brakes.
The company lowered its fourth-quarter revenue guidance to $1.73 billion from its previously forecast range of $1.80 billion to $1.85 billion. The lower revenue is expected primarily due to weaker-than-expected sales of retail and iNAND products.
SanDisk also mentioned its gross margin in the press release, which appears to be another large factor in adjusting the guidance for total revenue. The gross margin for the fourth quarter is expected to come in at approximately 45%, which is also below the previously guided range of 47% to 49%.
The initial response to this lowered guidance had shares drop roughly 14% in one day.
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The brokerage firm Nomura appears to have taken the warnings seriously and downgraded SanDisk to a Reduce rating from Neutral, as well as lowering its price target to $65 from $70. This call came just a day before earnings were to be reported, and it implies a downside of 17.5% from Tuesday’s close.
SanDisk’s 50-day moving average is $96.92, and the 200-day moving average is $94.19. Both moving averages have recently become immaterial following the lowered guidance that SanDisk gave in mid-January.
Shares of SanDisk were up 0.4% at $79.09 after the open of Wednesday’s trading session. The stock has a consensus analyst price target of $103.71 and a 52-week trading range of $66.80 to $108.77. The market cap is now about $17 billion.
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