SanDisk: “A Rapid Deterioration In Consumer Confidence”

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SanDisk went sans profits during the most recent quarter, the result of softening consumer demand for flash memory and MP3 players.

After the closing bell Monday, the company reported a massive loss of $68 million, or 30-cents per share, a reversal from year-ago earnings of $28 million, or 12-cents per share.

That came as a serious surprise to both analysts and Wall Street investors.  On Tuesday, shares of SNDK slipped $4.31 to $13.62, a 24 percent loss, heightened by broader fears of an economic slowdown.  Assessing the situation, SanDisk chief executive Eli Harari pointed to a “rapid deterioration in consumer confidence,” one that is cooling purchases on downstream consumer electronics devices.

That is causing a glut in the supply of flash-based memory, and forcing SanDisk to rewrite its production levels.  “Our team is adapting quickly to the deteriorating economic climate, and we are taking aggressive steps to protect our balance sheet, and improve our competitiveness through these difficult times,” Harari said.

The SanDisk report follows a dour scorecard from higher-end, mobile music manufacturer Sony Ericsson, and a conservative earnings forecast from Apple.