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SanDisk sees brighter 2013 with higher NAND prices

By Noel Randewich

SAN FRANCISCO (Reuters) - SanDisk raised its forecast for revenue this year and said it expects higher prices for its NAND memory chips, which are used in smartphones and tablets.

Chief Financial Officer Judy Bruner's comments to analysts on a quarterly conference call on Wednesday helped reverse losses in SanDisk's stock after the company posted quarterly results that disappointed some on Wall Street, despite beating estimates.

SanDisk said it expects a "healthy" supply/demand balance this year. But it also reaffirmed plans to increase its supply of NAND by less than the industry average, a strategy that should help maintain prices, but could limit the company's growth in shipments.

Bruner told Reuters in a separate interview that slower supply growth this year follows growth in 2012 that outpaced the industry.

"This year, we're growing it somewhat less than the industry. But over time, I believe we are maintaining our share," she said.

SanDisk raised its 2013 revenue target to a range of between $5.6 billion and $5.75 billion from a previous range of $5.3 billion to $5.6 billion.

It also gave a forecast for June-quarter revenue that beat analysts' expectations.

"Based on our decision to add no new wafer capacity beyond productivity improvements in 2013, we expect to be supply constrained for the remainder of the year," Bruner said.

Following an industry slump in memory chip prices last year, prices for DRAM and NAND memory chips have been strengthening.

Last year Apple, a major purchaser of NAND chips worldwide, accounted for almost 13 percent of SanDisk's business. Bruner declined to say how much of SanDisk's business currently comes from Apple.

SanDisk's revenue rose 11 percent year-over-year to $1.34 billion in the January-March quarter. Bruner said she expects revenue in the June quarter to be between $1.35 billion and $1.4 billion.

Analysts on average expected first-quarter revenue of $1.307 billion and June-quarter revenue of $1.35 billion, according to Thomson Reuters I/B/E/S.

Its net income was $166 million, or 68 cents a share, compared to $114 million, or 46 cents a share, in the same quarter last year.

Its non-GAAP EPS was 84 cents per share. Analysts had expected EPS of 79 cents.

Shares of SanDisk were up 0.62 percent in extended trade after closing down 3.08 percent at $55.72.

(Reporting by Noel Randewich; Editing by Dale Hudson and Leslie Gevirtz)

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