SanDisk Corp said the glut in the memory chips market will continue to hurt prices for the rest of the year, sounding its second revenue warning in as many quarters.

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)