M-Systems Flash Disk Pioneers (Nasdaq:FLSH) hasten to assure investors on September 21 that it will meet third-quarter forecasts, after rival SanDisk Corporation (Nasdaq:SNDK) released an acute earnings warning.
More specifically, M-Systems said that it expects revenue to be slightly higher and its operating loss narrower in the third quarter compared with the second quarter.
M-Systems has already lowered forecasts three times this year. For the second quarter, the company reported a 38% drop in revenue from the first quarter to $9.4 million. It expects to lose 12 cents per share in the third quarter.
SanDisk is connected with Israel in three ways: its rivalry with M-Systems, its R&D center at Tefen Park, northern Israel, and its partnership in the fab that Tower Semiconductors (Nasdaq:TSEM) is building in Migdal Haemek.
SanDisk announced it expects to lose 60 cents per share in the third quarter, compared with earlier forecasts of a maximum 15-cent loss. It expects revenue to dive 35% from the second quarter, for which it posted income of $88 million. It also anticipates marked erosion in its profit margins.
On September 20, Tower Semiconductors announced that it and its strategic partners decided to convert to equity $53.7 million of previously established credits applicable against future purchases of wafers. The credits will be converted at a price of $12.75 per share. SanDisk will be getting 1.3 million ordinary shares.