In its first fiscal quarter of 2013, SanDisk Corporation (NASDAQ:SNDK) set a record with revenue of $1.3 billion, up 11% from the first quarter of 2012. Non-GAAP profits came to $207 million, or $0.84 per share, up 33% from $156 million a year earlier.
Solid-state drives reached 20% of sales, up from 3% in 2011 and 10% in 2012. The margin on these instruments is high, and as the solid-state business continues to climb, SanDisk’s net margin, which had been in decline the past few years, should improve to the 16%-to-18% range this year and beyond. Not only that, but SanDisk Corporation (NASDAQ:SNDK)’s products are ubiquitous in “smartphone” situations, both as original equipment and as add-on memory drives.
SanDisk Corporation (NASDAQ:SNDK)’s balance sheet is in commendable shape, with long-term debt of just $790 million and cash on hand of $995 million. It is trading at a PEG of just 0.45. For many investors seeking a long-term position in the technology sector, I believe SanDisk to be a suitable choice, despite the lack of a dividend.
Juniper Networks, Inc. (NYSE:JNPR) is a different type of tech company; it focuses not just on consumer products but also Internet infrastructure. It recently reported solid, if unspectacular first-quarter results. Revenue came to $1 billion, a 3% jump from last year. Profits of $91 million, or $0.18 per share, were a solid 20% above expectations, and a six-fold increase from last year’s same quarter. The news, however, was not all good.
Over the course of the first quarter, Juniper Networks, Inc. (NYSE:JNPR) burnt through some $360 million in cash, meaning that over the past 12 months, Juniper has used about $1 billion in cash to fund its operations. There were no acquisitions and capital spending took no significant jumps. Some of that cash has been going into share repurchases, as Juniper spent $130 million on its share-repurchase program in the first quarter.
Juniper Networks, Inc. (NYSE:JNPR) relies on the health of the world economy perhaps more than any other company I have discussed today. Some 25% of its revenue comes from its three biggest customers, Verizon Communications Inc. (NYSE:VZ), AT&T Inc. (NYSE:T) and China Mobile. Goldman Sachs recently downgraded Juniper, citing competitive concerns. I agree with the big brokerage, and am no better than lukewarm on Juniper.
Conclusion
The companies discussed above have a big opportunity to thrive in the current environment where technology can be used to fight crime. However, they need to be focused on innovation, and they need to execute on that innovation. Oracle Corporation (NASDAQ:ORCL) is a good choice for conservative, risk-averse investors. I believe Hewlett-Packard Company (NYSE:HPQ) should be avoided until it shows signs of true revenue growth coming from new product offerings. Investors should consider SanDisk Corporation (NASDAQ:SNDK) for long-term growth. In today’s uncertain global economy, investors should remain cautious about investing in Juniper Networks.
The article An Overview of 4 Large Tech Firms originally appeared on Fool.com and is written by Bill Edson.
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