Shares of SanDisk Corporation Sink 7% Despite Strong Q2 Results

SanDisk met or beat every target in the second quarter, but the report still couldn't support share prices after an incredible 24-month run.

Jul 16, 2014 at 5:09PM
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Data storage specialist SanDisk (NASDAQ:SNDK) just reported results for the second quarter of 2014. The company met or exceeded every analyst target. Regardless, SanDisk shares fell nearly 7% in after-hours trading.

Analysts were looking for adjusted earnings of $1.39 on $1.6 billion in revenue.

SanDisk reported non-GAAP earnings of $1.41 per share and sales slightly above $1.6 billion. 

Solid-state storage solutions have become a core growth driver for SanDisk. That product category now represents 29% of total sales, up from 16% in the year-ago quarter.

Gigabytes of storage shipped increased by 51% year-over-year. On the other hand, average selling prices declined by 26%. Both of these metrics represented extremes not seen since the end of 2012.

Management also provided positive soundbites (but no firm guidance) on future quarters. "Our results position us well to deliver another record year in 2014," said SanDisk CEO Sanjay Mehrotra.

SanDisk also announced its next quarterly dividend as part of this report. Payable on August 25 to shareholders of record on August 4, this payout will deliver $0.30 per share. It's a 33% increase from the former $0.225 payout per share, and the first dividend increase since SanDisk announced its first policy a year ago.

Coming into this report, SanDisk shares had set an all-time high during regular trading hours, rising 53% year-to-date and 77% over the last 52 weeks. Shares had also more than tripled in two years.

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Anders Bylund has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Apple. Try any of our Foolish newsletter services free for 30 days.

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