Updated from 5:31 p.m. EDT

Data storage firm SanDisk ( SNDK) said first-quarter earnings and revenue doubled from last year, thanks to a 153% increase in royalty income. The shares sold off after hours, however, as investors sitting on a stock that has risen better than 100% over the last 12 months were hoping for more.

The Sunnyvale, Calif.-based company said net income rose to $63.6 million, or 34 cents a share, compared to $24.9 million, or 17 cents a share, in the same period a year ago. Revenue rose 122% to $387 million.

Analysts were forecasting earnings of 32 cents a share on revenue of $372.4 million.

SanDisk was the second-most-active stock on the Instinet after-hours session, recently trading down $4.56, or 14%, from its 4 p.m. EDT close to $27.95.

Traders appeared to be focusing on some potentially troubling margin trends at SanDisk. The company said its price per-megabyte fell 4% in the first quarter compared with the fourth quarter, and fell 19% compared with the year-ago quarter. Total gross margin was 40% of revenue in the quarter compared with 42% in the fourth quarter, while product gross margin was 32% in the first quarter compared with 36% in the fourth quarter.

"The first quarter was another good quarter for SanDisk given the traditional first-quarter seasonality," said president and CEO Eli Harari. "Royalty income significantly exceeded our expectations due to strong sales of flash memory by our licensees in the fourth quarter."

Income from license and royalties increased 153% to $48 million while product sales surged 118% year over year to $339 million.

SanDisk said it continues to be optimistic about the prospects for 2004. Total annual revenue is expected to range from $1.6 billion to $1.8 billion, with second-quarter sales in the range of $400 to $420 million. License and royalty revenue are projected to range from $40 million to $42 million in the second quarter. The firm expects to spend $75 million on capital equipment outlays.

Analysts had been forecasting second-quarter sales of $406.2 million, according to Thomson First Call, and full-year sales of $1.72 billion.