Smart Modular forecast a profit of 21 cents to 23 cents per share on sales of $160 million to $165 million for its fiscal fourth quarter ended in August.

The earnings prediction includes about 3 cents to 5 cents per share related to a release of deferred tax asset valuation allowance, the company said.

Analysts polled by Thomson Financial expect a fourth-quarter profit of 24 cents per share on $206.7 million in revenue.

For the fiscal 2007, Smart Modular forecast profit of about 88 cents to 90 cents per share on sales of about $823 million to $828 million.

Analysts, on average, expect a fiscal 2007 profit of 91 cents per share on $869.5 million in revenue.

Company officials blamed the lower-than-expected results on the continued difficult DRAM pricing environment, along with a leveling in unit demand.

Smart Modular is scheduled to report its fourth-quarter and fiscal 2007 financial results after the market closes on Oct. 3.

Smart Modular shares finished regular trading unchanged at $9.02.