SanDisk (SNDK) swung to a first-quarter profit but the company missed analysts' earnings estimates as pricing problems continue to hit the flash memory maker.
The Milpitas, Calif., company said Thursday that it earned $17.9 million, or 8 cents a share, compared to a loss of $575,000 a year earlier.
Excluding items, the company earned 21 cents a share, missing analysts' consensus estimate of 26 cents a share.
However, revenue rose 8% to $850 million, beating Wall Street's expectation of $810.9 million.
Product sales were solid on the strength of our international business, Sansa MP3 players and sales to the mobile handset and GPS markets. Pricing was challenging throughout the quarter due to industry-wide excess supply which adversely impacted our product gross margin," said Eli Harari, Chairman and CEO in a press release.
"We expect demand to increase seasonally during the second quarter and price declines to moderate; however, product margins are expected to continue to be under pressure in Q2 with the anticipated benefit of low cost 43-nanometer and 3-bits per cell coming in the second half of the year, " he added. "We are focused on cost controls and expense reductions and we continue to believe that the cumulative impact of price declines in recent quarters will accelerate the creation of new markets for Flash storage."
SanDisk said the average price per megabyte sold in the first quarter declined 61% on a year-over-year basis and 29% sequentially.
Shares of SanDisk were recently up 44 cents, or 1.7%, to $26.34 in after-hours trading.
Earlier this month, shares of DRAM memory maker
rose despite a disappointing earnings report, as analysts believed the company was making progress toward diminishing a glut of inventory.
This article was written by a staff member of TheStreet.com.