Imation ( IMN) warned that third-quarter profit will be hit hard by soft sales of flash memory-based products. The Oakdale, Minn., company expects to make 15 cents to 18 cents a share for the quarter, including a nickel a share worth of restructuring costs. Analysts surveyed by Thomson Financial were looking for a 43-cent profit. "Our preliminary flash results are very disappointing and we have taken very specific and aggressive action including increasing prices, reducing the number of SKUs, and limiting promotional activity with a number of our retail channel partners," said CEO Frank Russomanno. "We believe these actions will result in a more selective and more profitable participation in the USB Flash market. We will only participate in those channels and regions that provide appropriate margin opportunities." The company, which was spun off from former parent 3M ( MMM) a decade ago, also cut its 2007 outlook for operating income but said it is "taking aggressive actions to position the company for improvement in Q4 and a successful FY 2008." Shares were halted late Wednesday after rising 43 cents in regular trading to $25.51.