SanDisk Shares Plunge on Weak Guidance

Shares of flash memory manufacturer SanDisk plummeted on Wednesday after the company lowered its forecast late Tuesday for earnings in the current quarter. The news prompted a number of highly followed stock analysts to downgrade the company’s stock, sending shares down more than 10 percent through the first half of Wednesday’s trading session. In addition to the handful of downgrades, analysts almost unanimously dropped their price targets for the stock.

SanDisk manufactures so-called NAND chips used as torage memory for mobile devices like smartphones and tablets. The company cited decreasing demand for the chips as the reason for the lowered outlook, which mirrors similar warnings from SanDisk’s chief rivals in the growing space. SanDisk is now expecting revenue this quarter to be about $1.2 billion, below the range of $1.3 to $1.35 billion it forecast back in January.

Based in Milpitas, California, SanDisk is set to report its first-quarter results later this month, and cautioned Wednesday that its gross margins will likely fall short of its previously forecast range of 39-42 percent, as growing competition and weaker demand have forced suppliers to cut prices across the flash memory sector.