SanDisk, which sells chips to device makers of smartphones, cameras and other mobile devices, is increasingly using NAND chips in its own branded solid-state drives that are sold directly to companies and consumers.

While they remain significantly more expensive than mechanical hard drives, solid-state drives, or SSDs, are gaining popularity in data centers and consumer laptops due to their increased efficiency.

"SSDs are becoming a bigger proportion of the company, which means less volatility in earnings," said Pacific Crest analyst Monika Garg. "They're moving up the value chain."

Riding an industry recovery in NAND prices, SanDisk's shares have surged 50 percent in the past year, compared to a 24 percent increase in the Standard & Poor's 500 index.

The Milpitas, California-based company posted revenue of $1.73 billion, up 12 percent from the year-ago quarter. Analysts on average had expected $1.703 billion, according to Thomson Reuters I/B/E/S.

Net income rose to $338 million, or $1.45 per share, from $214 million, or 87 cents per share, a year earlier.

Excluding one-time items, earnings were $1.71 per share. That was better than the $1.58 expected by analysts.

Shares of SanDisk rose 0.40 percent in extended trade after closing up 0.42 percent at $72.19 on Nasdaq.

(Reporting by Noel Randewich; Editing by Richard Chang)

By Noel Randewich