SanDisk cheers; Qualcomm doesn't

Bullish outlooks help boost SanDisk and Starbucks shares. But eBay and Qualcomm drop on weak guidance.

By Charley Blaine Apr 21, 2010 9:23PM
Charley BlaineFutures trading suggests U.S. stocks will open lower on Thursday, but a number of companies that reported earnings after Wednesday's close appeared poised for gains.

Chief among the winners: flash-memory maker SanDisk (SNDK) and coffee-shop operator Starbucks (SBUX).
But eBay (EBAY) and Qualcomm (QCOM) disappointed so badly with earnings that came after the close that they may weigh on the stock market on Thursday.

A lot of growth ahead for SanDisk
SanDisk shares jumped 6.8% after hours to $40.13. The company, whose chips turn up in mobile telephones and flash-memory drives, earned $234.7 million, or 99 cents a share, compared with a loss of $208 million, or 92 cents a share a year ago. SanDisk

Revenue rose 65% to $1.1 billion. Excluding one-time items, SanDisk said earnings were 95 cents a share, better than the analyst consensus of 59 cents. The consensus revenue estimate had been $985.9 million.

The company said revenue could hit $4.56 billion for the year, up from prior guidance of $4 billion to $4.4 billion.

And the market is only beginning to take off, CEO Eli Harari told CNBC. "We think most people don't fully appreciate how large flash is going to be in the next decade."
Starbucks easily beats estimates
Starbucks earned 29 cents a share after one-time charges, up from 16 cents a share a year ago. Analysts had estimated 25 cents a share in earnings. Starbucks

Revenue was up 9% to $2.53 billion, ahead of the Street estimate of $2.4 billion. Same-store sales, a key indicator of a retailer's health, were up 7%. 

Starbucks boosted its fiscal-third-quarter guidance to $1.19 to $1.22 a share from January guidance of $1.05 to $1.08 a share.

Growth in eBay's auction business has slowed
EBay shares were down 8.1% to $24.15. The online auction house earned 42 cents a share in the first quarter, a penny better than expected. Revenue of $2.2 billion was up 8.2% and in line with estimates. eBay

But the company said it expects second-quarter earnings of 37 cents to 39 cents a share. Analysts were expecting 40 cents.

For the year, the company is still with guidance of $8.8 billion to $9.1 billion in revenue. The consensus estimate has been $9.1 billion or higher.

The company is trying to revitalize the auction business, which has stagnated. It also is getting hurt by the dollar's rise.

Pricing woes hit Qualcomm
For the fiscal second quarter ended last month, Qualcomm earned 59 cents a share after one-item items, 2 cents better than expected and up from a loss of 3 cents a share a year ago. Qualcomm

Revenue was $2.66 billion, up 8.6% but flat compared with the fiscal first quarter.

Free cash flow was $823 million, down 29% from a year ago.

But prices for chips in cell phones remain weak, the company said. So, for the fiscal third quarter, Qualcomm sees revenue of $2.5 billion to $2.7 billion and earnings after items of 51 to 55 cents a share, down from $2.74 billion in the 2009 fiscal third quarter.  The consensus estimate was $2.66 billion and 55 cents.

For the full year ending in September, the cell phone chip company sees revenue of $10.4 billion to $11 billion and profits of $2.21 to $2.32 a share; the Street has been projecting $10.77 billion and $2.31.

"They're feeling the recovery in emerging markets," Broadpoint Amtech analyst Mark McKechnie told Reuters. "But they're not feeling it strong enough in developed markets."

Health reform may hit Amgen
Amgen (AMGN) shares dropped 2.4% in regular trading and an additional 3% immediately after the company released its earnings. But the shares recovered to $58.51, off just 0.3%.

Sales of two of the company's top drugs -- Enbrel and its embattled anemia drug, Aranesp -- missed estimates. AmgenEnbrel treats autoimmune diseases.

Aranesp is controversial because it has been shown to increase problems for some cancer patients.

The company said the new health care reform law might cut sales by $200 million to $250 million this year, or about 2%.

Amgen's 2009 revenue was $14.6 billion.
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