SanDisk Corporation (NASDAQ:SNDK) the maker of flash memory cards continues its troubled journey, following a downwardly revised midpoint forecast in its first quarter revenue earnings. Following the announcement of a 9% downward revision from previous indicated, the share prices of the stock were found to slide sharply, nearing 18.45%. SanDisk management indicated that the reason for the downward revision is the ‘product-qualification delays.’ Besides, further drop in sales was also a cause for the guidance revision, the company noted.
This is the second such update the company has released, with its earlier warning made in January 2015. The company had reported at that time that the fourth-quarter revenue short fall from expectations was due to weak sales in retail division as well as the iNAND flash memory products.
The double warnings of market downfall in consecutive quarters are strong indications that all is not well at SanDisk Corporation (NASDAQ:SNDK).
Thus far, SanDisk major appeal has been its mobile industry based product, NAND. These flash memory types that are deployed in laptops as well, due to which these components have always had explosive market growth. SanDisk Corporation has benefitted from such growth.
Now, flash memory makes its way to the next storage places, the data centers. As the world moves towards cloud computing, data centers are become world sinks to hold assets of online users. Therefore, the use of flash memory is on the ascendency. SanDisk is expected to gain from technology world’s move to data centric-storage. The company has already taken the steps towards meeting the new challenges of flash memory, by acquiring Fusion-io in 2014 for $1.1 billion.
SanDisk Corporation (NASDAQ:SNDK) as of date is a stock in the red. However, its potential for growth in the flash memory space, does hold out promise for the long staying investor.