US memory chip maker SanDisk saw its shares decline after its earnings outlook failed to meet Wall Street's high expectations.

During its fourth-quarter earnings release for fiscal 2026 (April to June) on August 5 local time, SanDisk issued a revenue forecast of $10.3 billion to $10.8 billion for the upcoming first quarter (July to September).

This is lower than the average market consensus of $10.8 billion compiled by financial information provider FactSet.

However, it aligns with the consensus of $10.5 billion compiled by LSEG.

The projected adjusted earnings per share (EPS) is set between $44 and $46, which is higher than the consensus estimates of $44.72 by FactSet and $43.12 by LSEG.

The company projected a gross margin of 83% to 85%, similar to the fourth-quarter figure of 84.6%.

SanDisk's fourth-quarter revenue and adjusted EPS both surpassed market expectations.

Revenue surged 51% from the previous quarter to $8.97 billion.

This exceeded the FactSet consensus estimate of $8.48 billion.

Adjusted EPS stood at $39.25, also beating the market expectation of $34.96.

SanDisk CEO David Goeckeler stated in a release that in fiscal 2026, the company established the data center division as a "core growth pillar" and strengthened partnerships with customers.

He added, "Our technology and products are creating value for customers and generating sustainable and stable free cash flow."

Fourth-quarter data center revenue reached $2.97 billion, a 103% growth compared to the previous quarter.

Revenue in the same period last year was $210 million.

Revenue from the edge division, which includes NAND flash storage for smartphones and PCs, also surged 48% from the previous quarter to $5.43 billion.

Following its announcement in April regarding five new business model (NBM) contracts, SanDisk stated that it signed three additional new contracts and expanded two existing ones this quarter.

MarketWatch reported that these contracts are expected to generate at least $93.3 billion in revenue.

However, SanDisk shares closed down 5.4% that day and extended losses with an additional drop of over 7% in after-hours trading.

(Photo: Getty Images)