Will SanDisk (SNDK) Miss Earnings Estimates? - Analyst Blog
April 14 2014 - 9:00AM
Zacks
SanDisk Corp.
(SNDK) 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) 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) 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) has an Earnings
ESP of +3.42% and holds a Zacks Rank #1
APPLE INC (AAPL): Free Stock Analysis Report
HELMERICH&PAYNE (HP): Free Stock Analysis Report
MICRON TECH (MU): Free Stock Analysis Report
SANDISK CORP (SNDK): Free Stock Analysis Report
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