LOS ANGELES (AP) -- Shares of flash memory maker SanDisk Corp. fell Thursday after the company forecast first-quarter and 2012 revenue that fell short of analysts' predictions because of weaker demand from certain mobile device makers and falling prices.
THE SPARK: Milpitas, Calif.-based SanDisk reported fourth-quarter earnings that modestly beat Wall Street forecasts, but its outlook for the first quarter and beyond were disappointing.
For the fourth quarter, it posted $1.29 per share of adjusted earnings, compared with $1.26 per share expected by analysts polled by FactSet, and $1.58 billion in revenue, versus expectations for $1.57 billion.
But it forecast first-quarter revenue of $1.3 billion to $1.35 billion, significantly below the $1.46 billion expected by analysts. It also saw 2012 revenue of $6.2 billion to $6.6 billion, below the $6.64 billion analysts were looking forward to.
The company also said the strong yen would negatively impact profit margins and said it would delay expansion plans at a chip facility in Japan until at least July from May based on slower growth in demand.
THE BIG PICTURE: SanDisk makes memory chips for smartphones and tablets and solid-state drives for computers. While its 2012 revenue outlook still represents a gain of 9 percent to 17 percent, expectations for the gains were higher.
THE ANALYSIS: Wedbush analyst Betsy Van Hees recommended that investors move out of SanDisk shares and into those of Micron Technology Inc., which she said had a better relationship with top-end device makers such as Apple Inc.
She maintained a neutral rating on SanDisk but lowered her price target on shares to $45 from $51.
SHARE ACTION: Down $4.99, or 9.5 percent, to $47.35 in afternoon trade. Shares had been climbing steadily off a 52-week low of $32.24 reached in August.
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