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SanDisk Weakness May Signal Troubled Earnings Season: Pro

Tuesday, 3 Apr 2012 | 6:57 PM ET

On Tuesday, money pros were wondering what to make of the latest from SanDisk , which cut first-quarter revenue outlook, citing weaker-than-expected demand and lower pricing.

The company now expects first-quarter revenue to total $1.2 billion, down from its prior forecast of $1.30 billion to $1.35 billion.

“They had already guided down,” explains trader Dan Nathan. “They’re now missing already lowered guidance.”

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“I think SanDisk highlights troubles (broadly),” he adds “ They talked about weaker pricing and weaker demand.

“Weak demand,” echoes Keith McCullough of Hedgeye. He worries that weak demand is starting to emerge as a theme.

“We also heard it from FedEx and BHI,” he says. “How many times have you heard how great earnings season is going to be? Weak demand is new. And we’re seeing across different companies.”

Considering earnings season kicks off next week, “That could be bearish,” he says.

“What did Dell and Hewlett tells us back in February - PC demand was weak,” adds trader Dan Nathan.

Another omen of trouble?

“Micron could trade down in sympathy on Wednesday,” speculates trader Joe Terranova. “I would expect that stock to go down.”

Trader Tim Seymour doesn’t extrapolate developments to the same degree. “San Disk has got some problems under its own roof, that’s what this says to me.”





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Trader disclosure: On April 3, 2012 , the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Keith McCullough is long GLD; Keith McCullough is long XLU; Tim Seymour is long INTC; Tim Seymour is long BAC; Tim Seymour is long CSCO; Tim Seymour is long FCX; Joe Terranova is long VRTS; Joe Terranova is long NXPI; Joe Terranova is long IBM; Joe Terranova is long MCD; Joe Terranova is long EMC; Joe Terranova is long MSFT; Joe Terranova is long JOY; Joe Terranova is long OXY; Joe Terranova is long JQD; Dan Nathan is long AAPL APR 585 PUTS, LONG JAN 450 PUTS; Dan Nathan is long BAC MAY 7 PUTS; Dan Nathan is long YHOO APRIL 16/17 CALL SPREAD; Dan Nathan is long IBM APRIL 205/200 PUT SPREAD; Dan Nathan is long RIMM JAN 20/27.5 CALL SPREAD

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