SanDisk Shares Slide After Posting Big Profit Loss

Shares of SanDisk slid in premarket trading Tuesday after the maker of flash memory cards posted a larger-than-expected fourth-quarter loss, said it expects 2009 to be challenging and that it may sell stock to raise cash.

AP

Shares fell over $2, or nearly 19 percent, at around $9, after closing Monday at $11.28.

The Milpitas, Calif., company on Monday posted a loss of $1.86 billion, or $8.25 per share, compared with year-ago profit of $105.8 million, or 45 cents per share.

The latest results included $1.91 billion worth of charges for asset write-downs as a result of the sustained drop in SanDisk's market capitalization, inventory-related charges and idle capacity costs, and other items.

The company also said it may need to go to the stock market to raise $300 million to $500 million for capital equipment. That would dilute current shareholders' stakes by 12 percent to 20 percent.

"With the deteriorating balance sheet, equity offering in the making, and negative near-term outlook, we would stay on the sidelines for a better entry point into the stock," wrote Lazard Capital analyst Wendy Marx in a Tuesday morning note.

Sandisk's total revenue slid 31 percent to $863.9 million. However, the results beat Wall Street's forecast for sales of $766.7 million.

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