57.5 F
Laguna Hills
Monday, Mar 18, 2024
-Advertisement-

Western Digital Earnings Fall Short of Expectations

Shares of Lake Forest disk drive maker Western Digital Corp. slumped Wednesday after the company reported results for the June quarter that were up from a year earlier but fell short of analysts’ expectations.

Investors sent shares down 3% in afterhours trading during an already slumping day on Wall Street. Western Digital had a recent market value of $7 billion.

For the three months through July 2, Western Digital reported sales of $2.4 billion, up 26% from a year earlier and just short of analysts’ expectation of $2.45 billion in revenue.

Including a one-time legal expense of $27 million, Western Digital posted $265 million in profits, up 35% from the year-ago quarter.

Excluding the charges, Western Digital still fell short of analysts’ expected $309 million in profits.

It ended the quarter with $2.7 billion in cash.

Chief Executive John Coyne said the company saw “softer than anticipated June quarter demand.”

Western Digital makes disk drives that go into computers, servers, external storage drives and other consumer electronics.

The company said it shipped some 50 million drives during the June quarter.

It maintained its market share lead over top rival Scotts Valley-based Seagate Technology LLC as the top maker of disk drives.

Seagate shipped 47 million drives during the quarter.

The June quarter overall was a tough one for drive makers.

Drive makers typically see less demand in April and May. The difference this time was Europe’s debt crisis, which made consumers there hesitant and Western Digital’s products more expensive with a decline in the euro.

Limited price cuts and production cutbacks helped Western Digital and Seagate avoid disaster in a sector known for booms and busts.

Seagate reported results late on Tuesday that missed its own outlook and Wall Street’s expectations.

“It was well known that the industry was experiencing pricing pressures relative to the past few quarters,” said Kaushik Roy, an analyst at Wedbush Securities Inc. in San Francisco. “We infer that Seagate lost market share in an attempt to maintain better pricing.”

Roy kept his “neutral” rating on Seagate’s shares and lowered his price target to $17 per share, down from a previous estimate of $20 per share.

Seagate’s shares were trading at around $13 on Wednesday on a market value of about $6 billion.

Want more from the best local business newspaper in the country?

Sign-up for our FREE Daily eNews update to get the latest Orange County news delivered right to your inbox!

-Advertisement-

Featured Articles

-Advertisement-
-Advertisement-
-Advertisement-
-Advertisement-

Related Articles

-Advertisement-
-Advertisement-