Western Digital Beats Estimates, Faces Concerns on ThailandWednesday, October 19, 2011
Irvine-based disk drive maker Western Digital Corp. beat Wall Street revenue and profit expectations in the September quarter.
The company reported revenue of $2.7 billion for the quarter, up 12.5% from a year earlier.
Analysts on average were expecting revenue of just less than $2.5 billion.
Profits topped $239 million, up 21% from a year earlier.
Wall Street had forecast profits of $223 million.
The company said it shipped 58 million hard-drive units in the quarter, compared with 51 million for the same period a year earlier.
Western Digital’s disk drives go into computers, external storage devices, corporate networks and consumer electronics.
The company in the September quarter recorded a $21 million charge associated with the planned acquisition of San Jose-based Hitachi Global Storage Technologies and unrelated litigation expenses.
The $4.3 billion deal, expected to close this quarter, is set to make Western Digital the undisputed leader in drives.
The company now leads by number of drives shipped but is second in revenue to archrival Scotts Valley-based Seagate Technologies LLC, which sells more corporate drives.
The strong earnings report was part of wild ride for Western Digital shares on Wednesday.
It started with a downward turn after Thailand officials said exports from the country could decline 40% in coming months due widespread flooding.
The flood caused two of Western Digital’s plants to shut down last week.
Western Digital shares were down more than 9% at the close of New York trading, then briefly rose in extended trading after its earnings report, only to dip again to a market value of $5.7 billion.
Heavier-than-usual monsoons, punctuated by typhoons, have deluged the region since July.
Hundreds have perished in flooding and scores of factories have been shut down.
The company earlier this week said flooding and related damage will have “significant impact on the company’s overall operations and its ability to meet customer demand for its products in the December quarter.”
Western Digital ships more than half its disk drives from Thailand.
It counts on a base of local suppliers for various components.
Analysts on average are expecting Western Digital to have revenue of $2.5 billion in the December quarter, with profits of about $256 million.