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Roundup: Sandisk meets 3Q forecasts

Sandisk (Nasdaq: SNDK) met analyst estimates in the third quarter.

After market close Wednesday, the maker of flash memory storage devices reported third quarter net income of $6.5 million, or 21 cents per share, in line with First Call's survey of five analysts. Net income rose 11 percent sequentially.

Third quarter revenue increased to $67.5 million, up 29 percent from the previous quarter and up 111 percent from the year-ago period, when Sandisk posted revenue of $32.1 million. CompactFlash and MultiMediaCard sales carried revenues higher, the company said.

Units shipped rose 24 percent from Sandisk's previous record, said Eli Harari, president and CEO. Sandisk is completely booked for the fourth quarter and sees a strong first quarter backlog, he added.

Not everything went smoothly in the third quarter. Product ross margins fell to 24 percent from 27 percent because of lower-than-expected manufacturing yields initially for 128 megabit products, and a 19 percent drop in average selling prices per megabyte. Parts shortages resulted in higher production costs.

Yields have improved since the beginning, Harari said. Sandisk expects product gross margins to improve "slightly" once 256 megabit devices begin shipping.

The recent Taiwanese earthquake didn't affect third quarter results. But the quake is expected to create spot shortages and higher expediting costs in the fourth quarter, Harari said. Sequential revenue growth will be lower in the fourth quarter, although margins are expected to improve in the first quarter of next year as higher prices go into effect for new orders.

Other companies reporting quarterly results:

  • Network Equipment Technologies
  • (NYSE: NWK) The troubled supplier of wide area networks beat analyst estimates by a wide margin in its fiscal second quarter.

    N.E.T. lost $400,000, or 2 cents per share, not including one-time events related to a restructuring announced in July. First Call's survey of two analysts predicted a loss of 7 cents per share for the quarter ended Sept. 26. Revenue fell to $64.8 million from $75.4 million in the year-ago period.

    Including restructuring charges, N.E.T. lost $2.9 million, or 14 cents per share.

  • Computer Network Technology Corp. (Nasdaq: CMNT) fell a penny shy of analysts' estimates in its third quarter Wednesday, earning $2.7 million, or 11 cents a share, on sales of $41.1 million.

    First Call consensus pegged the network storage company for a profit of 12 cents a share in the quarter.

    The $41.1 million in sales represents a 24 percent improvement versus the year-ago quarter when it made $1.8 million, or 8 cents a share, on sales of $33 million.

    The stock closed up 3/16 to 14 1/8 ahead of the earnings report.

    After falling to a 52-week low of 4 in October, the stock surged to a high of 30 5/8 in May.

  • AdForce Inc. (Nasdaq: ADFC) posted a smaller-than-expected loss in its third quarter, losing $6.4 million, or 34 cents a share, on sales of $5 million.

    That's a pretty impressive jump in sales considering it only record $1 million in the year-ago quarter when it lost $3.9 million, or $1.30 a share.

    First Call consensus expected AdForce to lose 38 cents a share in the quarter.

    Its shares ended off 1 1/8 to 24 7/8 ahead of the earnings report.>