SAN FRANCISCO -- Shares of SanDisk ( SNDK) rose in late trading Thursday after the memory chip maker beat third-quarter expectations.

Net income fell to $84.6 million, or 36 cents a share, from $103 million, or 51 cents a share, a year earlier. Excluding items like acquisition-related charges and stock compensation expenses, the company earned 54 cents a share, which handily beat analysts' average estimate of 32 cents.

Revenue rose 38% to $1 billion, also topping forecasts.

The company's gross margin rebounded sharply from 16% in the previous quarter to 24%, but remained below 32% in the third quarter last year.

"Gross margins and the pricing environment improved substantially and excellent execution at Fab 3 allowed us to respond to the surge in customer demand," Chief Executive Eli Harari said in a statement.

The average price per megabyte sold fell 61% from last year, and 16% from the previous quarter.

Shares were recently trading up 40 cents, or 0.8%, to $50.71.

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