SanDisk Corp.'s (SNDK) fourth-quarter profit fell 42% from a year-ago result buoyed by a large tax-provision benefit, while core earnings registered a slight improvement.
Shares still fell 2.6%, to $50.99 after hours, as margins weakened. The stock had climbed 7.8% over the past year through Wednesday's close.
SanDisk, once mainly known for small storage cards and thumb drives sold in retail stores, has expanded its business into devices like smartphones, tablets and digital music players. The company last year gained a bigger foothold in the market for enterprise solid-state drives, which are used by businesses in data centers, by acquiring Pliant Technology for $327 million.
As a maker of solid-state devices, Sandisk could also benefit from supply problems in the hard-disk drive industry, which lost a big chunk of its production capacity late last year due to devastating floods in Thailand, a major manufacturing center. Revenue was still in line with the company's guidance range, however.
The company's year-earlier result also included a $203 million tax-provision benefit that skewed the latest earnings change.
SanDisk reported a profit of $281.2 million, or $1.14 a share, down from $485.5 million, or $2.01 a share, a year earlier. Excluding stock-based compensation costs, income tax adjustments and other one-time items, per-share earnings edged up to $1.29 from $1.27. Analysts polled by Thomson Reuters were expecting $1.26 a share.
Total revenue rose 19%, to $1.58 billion. The company's October forecast called for $1.5 billion to $1.6 billion.
Gross margin narrowed to 42% from 43.4%.
-By Drew FitzGerald, Dow Jones Newswires; 212-416-2909; Andrew.FitzGerald@dowjones.com