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SanDisk Corp. Message Board

  • I think Q3 and Q4 2010 global economy will improve slightly
    currently eur 1,29 $ up 10% from 1,18 at the begining of June. That should help US and China (which indirectly would help US again) economy. At the begining of 2009 eur/$ was low that help Europe economy and indeed Germany and France were the first developed countries to emerge from recession in Q1 2009. At the end of 2009 eur/$ was higher, US economy showed strengh and Europe economy was slowing. June 2010 a new low Eur/$ Us economy is suffering a batch but Europe showed strong growth data. As far as finantial and sovereign debt crisis don;t get worse I think that is reasonable to expect growth strenghening in Q3 and Q4.

    Anyway I think that we can asume that Sandisk production for Q3 and Q4 is already sold due to strong demand.
    My estimates for 2010 are around 5 billion $ revenue and close to 5$ eps (baybe 4,8 or 4,9 but I think that it will be close to 5 $)
    Then the question is 2010
    from recent Sandisk earnings reports and interviews we can guess that 2011 conservative production will be up arond 70 % and cost reductions above 40%. The key data is price reductions numbers. This quarter was 15% yoy. I think it is quite reasonable to assume it will be between 15 and 30 % in 2011 depending on demand
    5 billion $ (2010) * 1,70 = 8,5 billion $ - 0,3*8,5 * 6 billion $
    I think that is quite reasonable and I would dare to say a little conservative estimation to assume 6 billion $ revenue in 2011 and around 6$ eps.
    In order to earnings falling below 2010 results, we should assume price cuts above 40%. That is posible but I think that requires a double dip recession and certainly a profound recession in the case of Sandisk, cause we should not forget that price declines increases demand for new products like SSD. Another important issue is that it seems that Sandisk has the lowest costs in bussiness, so it might be affected as it has happened in the past, but there are lots of weaker players that should be more affected (Micron for example was presenting negative results more time than Sandisk)
    Now if you want to invest buying stocks at this time, certainly Sandisk is a must buy.

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