Western Digital Corp. used its recent Investor Day to announce a quarterly dividend, while disappointing Wall Street by lowering its revenue projection for the current quarter.
The Irvine-based drive maker said it expects revenue of $3.9 billion to $4 billion in its fiscal first quarter, which ends Sept. 28. Western Digital had projected sales of $4.2 to $4.3 billion for the quarter, and analysts on average have been expecting revenue of $4.29 billion.
Executives attributed the pullback to dampened customer demand. Global hard drive shipments in the current quarter are now forecast at 140 million units, down from an earlier forecast of 157 million units.
The company reiterated its 12-month profit forecast of $2.47 billion, while the analyst consensus puts the figure at $2.28 billion.
Western Digital said its board has approved a quarterly cash dividend of 25 cents per common share, the first dividend in its 42-year history. The company also announced a $1.5 billion stock repurchase program.
The moves follow the recent promotion of Steve Milligan from president to chief executive (see related story, page 1). Milligan will assume his new duties when John Coyne retires from the top post in January.
Milligan is credited with turning around San Jose-based Hitachi Global Storage Technologies Ltd., a once unprofitable hard-drive unit of Hitachi Ltd. Western Digital acquired Hitachi Global in March for $4.3 billion.
Smart Suit
Newark, Calif.-based Smart Modular Technologies Inc. is suing Netlist Inc., alleging the Aliso Viejo-based company infringed on patents related to a recently introduced product line.
The filing in U.S. District Court for the Eastern District of California seeks a preliminary injunction to prevent Netlist from selling its HyperCloud line. HyperCloud products are designed to handle large memory capacity and billed to improve performance by 25% compared to the industry standard.
The product has been likened to expanding a highway from two to four lanes, allowing data to flow back and forth quickly. The HyperCloud product has been adopted in servers from New York-based IBM Corp., which helped Netlist during years of development.
Netlist said the complaint related to U.S. Patent No. 8,250,295 has no merit.
“None of our current products, including HyperCloud, infringe upon this recently issued ‘295’ patent,” Netlist Chief Executive C.K. Hong said.
Netlist is among several Orange County-based technology companies slated to benefit from a new line of chips recently debuted by Santa Clara-based Intel Corp. The world’s largest chipmaker is targeting data centers with cloud services, memory-product makers and others with a new line dubbed the Romley platform that’s touted to boost performance while lowering operating costs.
New Director
Paul Read, chief financial officer for Singapore-based electronics manufacturer Flextronics International, has been appointed to the board of Ingram Micro Inc.
Read, who will serve on the company’s audit and human resources committees, is the first board member approved under Chief Executive Alain Monié.
Monié took the helm of the world’s largest technology distributor in January. Ingram sees about $36 billion in annual revenue and nets less than a penny on the dollar in a razor-thin margin business.
Read, 46, brings executive experience to Ingram overseeing finances for a $30 billion Fortune 500 company with extensive global operations.
“Ingram Micro will benefit from his many years of hands-on, executive-level financial experience, as well as his valuable perspective on successfully operating a complex global organization,” Chairman Dale Laurance said.
Flextronics, which maintains its U.S. headquarters in Milpitas, employs more than 200,000 with operations in 30 countries.
Read has been finance chief there since June 2008 and was responsible for integrating its $3.6 billion acquisition of contract electronics maker Solectron Corp.
That track record could be beneficial for Ingram as it integrates the $840 million acquisition of Indianapolis-based wholesale distributor BrightPoint Inc.
BrightPoint saw $5.2 billion in sales last year. The company, which operates in nearly 25 countries, employs 4,000 people.
Read, prior to joining Flextronics in 1995, held various senior financial positions in the U.K. with Allied Steel and Wire, STI Telecommunications and Associated British Foods.
Milestone Looms
Consumer subscriptions to cloud-based storage services are forecast to reach 500 million this year, according to Englewood, Colo.-based market tracker IHS Inc.
That’s up from less than 300 million in 2011. Next year the rapidly growing segment is expected to see some 625 million consumers accessing cloud services, up 25% from 2012.
Double-digit growth is forecasts until at least 2017, when subscriptions are projected to hit $1.3 billion.
