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What: Shares of SanDisk (NAS: SNDK) sank 10% on Wednesday after the flash memory maker cut its first-quarter sales and profit forecast.
So what: SanDisk's warning is consistent with that of other flash memory makers, offering further confirmation that the sector is struggling. Booming demand for consumer gadgets has boosted NAND production in recent years, but now a glut in supply is leading to lower revenues and margins.
Now what: Expect the stock to remain volatile in the short term. SanDisk now expects first-quarter revenue of $1.2 billion, down from its prior view of $1.3 billion-$1.35 billion, and also sees gross margins below its previous forecast. Of course, given the long-term cloud computing and virtualization trends working in the company's favor, this might be a decent entry point for patient investors.
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At the time thisarticle was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.
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