The company, which has struggled to rein in the downward spiral in prices for NAND flash chips -- used as primary memory in phones and tablets -- projected second-quarter revenue of $950 million to $1.05 billion, well below the Street's $1.30 billion expectations.

"We expect the steeper price decline in the first half of 2012 to result in considerably lower price levels for the whole year, reflecting a weaker industry supply-demand balance than we had previously anticipated," the company said on a call with analysts.

For the first-quarter, profit nearly halved, while gross margins declined to 36 percent. It expects gross margins to fall further to 26-30 percent in the current quarter.

The company earned $114 million, or 46 cents per share, down from $224 million, or 92 cents per share, last year.

Excluding items, it earned 63 cents per share, while analysts were looking for 70 cents per share, according to Thomson Reuters I/B/E/S.

Revenue fell over 7 percent to $1.21 billion, in-line with lowered Street expectations. The company had pre-announced earnings early this month, warning of revenue and gross margin erosion during the quarter.

SanDisk shares fell 9 percent to $36.90 in extended trading. They had closed at $40.47 on Thursday on the Nasdaq.

(Reporting by Himank Sharma in Bangalore; Editing by Sriraj Kalluvila)

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