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After Lousy Release, Trade SanDisk Against $45: Terranova


“I’d have thought Ultrabooks and smartphones would be positive catalysts,” says a flabbergasted Peter Najarian. “Their negative a guidance is shocking!”

That’s the Fast Money pro’s knee-jerk reaction to the latest earnings report from SanDisk which showed that fourth-quarter net income fell 42 percent on higher costs and one-time charges.

In addition, the company forecast revenue in a range of $1.3 billion to $1.35 billion, which is below the consensus $1.46 billion estimate. For the full year, the company sees revenue of $6.2 billion to $6.6 billion, below the consensus $6.64 billion estimate.

As a result, investors sent shares the company's shares down nearly 4 percent in aftermarket trading.

The Fast pros and much of the Street were both expecting to hear something all together different. They thought SanDisk's release would be stronger due to the rising popularity of the kinds of gadgets that use SanDisk's “flash" memory, namely smartphones and tablets.

“Oh, well, the stock had a nice run,” adds trader Joe Terranova. “It was $1 away from its 52-week high. The question becomes how to trade. I’m long, but now shooting against $45.”

On a positive note, the CEO said the second half of the year looks better than the first.

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Trader disclosure: On Jan. 25, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders: Terranova is long VRTS; Terranova is long IBM; Terranova is long SU; Terranova is long SJM; Terranova is long BRCM; Terranova is long MUB; Terranova is long EMC; Terranova is long F; Terranova is long SBUX; Terranova is long V; Terranova is long AXP; Terranova is long APC; Terranova is long OXY; Terranova is long TRLG; Terranova is long JNPR; Terranova is long CSCO; Terranova is long WFM; Terranova is long XOM; Terranova is long UNG April $5 puts;  Finerman is long (JPM); Finerman is long (BAC); Finerman is long (PLCM); Finerman is long (IBM); Nathan is long AAPL Jan puts; Nathan is long BAC Jan puts; Nathan is long MS Jan puts; Nathan is long NFLX Jan calls; Nathan is long INTC Jan put spreads; Nathan is long MSFT puts; P. Najarian is long AAPL; P. Najarian is long BAC calls; P. Najarian is long C; P. Najarian is long JPM calls; P. Najarian is long MSFT; P. Najarian is long INTC; P. Najarian is long JCP

For Karen Finerman
Finerman's fund is long (AAPL)
Finerman's fund is long (JPM)
Finerman's fund is long (PLCM)
Finerman's fund is short (SPY)
Finerman's fund is short (MDY)

For Mike Khouw
No Disclosures with wires.

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