Sandisk suffers from memory glut -

SanDisk is moaning that a glut in the memory chips market will continue to hurt prices for the rest of the year.

This will mean that it is the second time that the memory maker has issued a revenue warning.

The company is finding it hard to rein in the downward spiral in prices for NAND flash chips. It had projected second-quarter revenue of $950 million to $1.05 billion, well below what Wall Street thought the company should be making. Wall Street figured that $1.30 billion would be a nice round figure.

However, in a conference call with analysts, SanDisk said that there would be a steeper price decline in the first half of 2012 to result in considerably lower price levels for the whole year.

This means a weaker industry supply-demand balance than SanDisk had anticipated.

Reuters  reported how for the first-quarter, profit nearly halved, while gross margins declined to 36 percent. SanDisk expects gross margins to fall further to 26-30 percent in the current quarter.

The company earned $114 million down from $224 million during the same time last year. Revenue fell by seven percent to $1.21 billion.

On the back of that news, SanDisk shares fell nine percent.