SanDisk posts sharp quarterly loss; shares tumble

By Eric Auchard

SAN FRANCISCO (Reuters) - SanDisk Corp (SNDK.O) quarterly results swung sharply to a loss in on Monday amid an unexpected decline in sales and warned worse was in store as it further slashes the prices of its memory chips in the current quarter, sending its shares down 14 percent after-hours.

Chief Financial Officer Judy Bruner warned investors to expect a sharp drop in third-quarter revenue as the company moves aggressively to cut the prices of its memory chip products to reduce a build-up of inventory.

"We are forecasting third-quarter total revenue between $750 million and $850 million," Bruner told investors on a conference call following its second-quarter report.

SanDisk reported revenue in the third quarter of 2007 of $1.04 billion.

The forecast is far below the range of $964 million to $1.24 billion expected by analysts, according to Reuters Estimates. The average forecast had been $1.09 billion.

Following the results and the lowered outlook, SanDisk shares fell to $15.48, a decline of 13.8 percent in extended trading. The shares had gained 2 percent to close at $17.93 on Nasdaq earlier on Monday.

SanDisk shares have been cut in half since mid-May, when they reached a recent peak just above $33.

Bruner said price declines for SanDisk, a leading maker of flash-memory chips used in consumer electronics and mobile phones, will be more aggressive in the second half of this year than they had been in the second quarter, when average prices per unit of memory declined 55 percent from a year ago.