Back to top

Will SanDisk (SNDK) Miss Earnings Estimates?

Read MoreHide Full Article

SanDisk Corp. is set to report first-quarter 2014 results on Apr 16. Last quarter, the company posted a positive earnings surprise of 8.8%. Let us see how things are shaping up for this announcement.

Growth Factors This Past Quarter

SanDisk posted solid fourth-quarter results with both its top and bottom lines surpassing the Zacks Consensus Estimate. Revenues from commercial and retail channels were strong, aided by higher mobile embedded and SSD sales. We also remain positive on management’s commentary of a turnaround in the coming quarters and strong secular demand for its storage products.

Furthermore, the acquisition of SMART Storage Systems is expected to expand SanDisk’s offerings in the Enterprise SSD segment. It is also worth mentioning that Apple Inc. (AAPL - Free Report) is currently a major customer of SanDisk. Hence, we believe that with price and cost benefits as well as a long-term NAND supply agreement with the likes of Apple will help SanDisk to outperform in the NAND market.

However, lackluster PC sales, European issues, competition from Micron Technology Inc. (MU - Free Report) and currency fluctuations could hurt fundamentals to some extent.

Earnings Whispers?

Our proven model does not conclusively show that SanDisk will beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. That is not the case here as you will see below.

Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at $1.17. Hence, the difference is 0.00%.

Zacks Rank: SanDisk’s Zacks Rank #1 (Strong Buy) when combined with a 0.00% ESP makes surprise prediction difficult.

We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Other Stocks to Consider

Here is another company you may want to consider as our model shows that it has the right combination of elements to post an earnings beat this quarter:

Helmerich & Payne, Inc. (HP - Free Report) has an Earnings ESP of +3.42% and holds a Zacks Rank #1  

Read the Full Research Report on SNDK
Read the Full Research Report on AAPL
Read the Full Research Report on MU
Read the Full Research Report on HP

Zacks Investment Research

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Apple Inc. (AAPL) - free report >>

Micron Technology, Inc. (MU) - free report >>

Helmerich & Payne, Inc. (HP) - free report >>

More from Zacks Analyst Blog

You May Like