Irvine-based Western Digital Corp. expects hard-drive shipments to be “significantly constrained” in the March quarter as it regains operations in Thailand.
The company expects to ship between 31 million and 33 million drives, down from nearly 50 million units in the same period a year earlier.
Revenue in the March quarter is projected to be in the range of $2 billion to $2.15 billion, down from $2.25 billion a year ago and in line with Wall Street expectations. Analysts on average forecast sales of about $2 billion.
Adjusted profits are projected between $269 million to $339 million, higher than the $146 million it saw a year ago and better than analyst estimates. Wall Street analysts on average expect adjusted profits of about $212 million.
The better-than-expected outlook came on the heels of the company’s December quarter earnings, which gave credence to recovery efforts in Thailand, where devastating floods last year severely impacted Western Digital’s operations. The company beat Wall Street expectations on quarterly revenue but fell short of profit targets.
Western Digital said revenue in the December quarter hit $2 billion, down 20% from a year earlier.
Analysts on average had forecast revenue of $1.8 billion.
Adjusted profits were $145 million, down nearly 36% from a year ago. Wall Street had expected $166 million.
Profit was helped by higher-priced disk drives that averaged about $69 a unit in the December quarter, up $22 from a year earlier, Chief Financial Officer Wolfgang Nickl told analysts and investors in a conference call last month.
The company shipped 28.5 million hard drive units in the recently ended quarter, down from 52.2 million a year earlier, or 45%. The total was higher than Western Digital’s October guidance of 22 million to 26 million shipped units.
Overall disk-drive shortages should peak in the June quarter, with fallout expected to lag late into the year or early 2013, Craig Berger, an analyst at Arlington, Va.-based FBR Capital Markets Corp., wrote in a recent note to investors.
Western Digital’s disk drives go into computers, external storage devices, corporate networks and consumer electronics.
The stronger-than-expected results prompted Needham & Co. analyst Richard Kugele to raise his rating on Western Digital stock to “buy” from “hold.”
Kugele had downgraded shares in November as recovery costs at Western Digital’s two plants in Thailand mounted in the wake of the worst floods to hit the region in decades. Its expenses related to flooding and damages in the December quarter were $199 million.
During the conference call Chief Executive John Coyne reiterated prior announcements that manufacturing in Thailand will be running at full capacity by September. Executives also updated a pending arbitration ruling levied against the company in November.
At the time arbitrators hit Western Digital with a $525 million ruling for “misappropriation of confidential information and trade secrets.”
The claims were pressed by chief rival Seagate Technology LLC of Cupertino. They involve a former Seagate employee, according to a filing with the Securities and Exchange Commission.
Late last month, the arbitrator awarded prejudgment interest in the amount of $105 million.
The company planned to file a petition to vacate the award on the basis that the arbitrator exceeded authority and failed to consider relevant evidence.
It expects the court to hear arguments on the petition in March or April.
Nigerian deal
Costa Mesa-based electric vehicle maker T3 Motion Inc. has landed a string of deals in the last month.
The company, which makes three-wheeled cruisers, received an order from its Nigerian distributor to ship 126 T3 electric stand-up vehicles and 126 Motiontrak GPS tracking systems that will be used by government agencies. Nigeria is the world’s eighth most populous nation, with 155 million people, and Africa’s third largest economy behind South Africa and Egypt.
More than 3,000 T3 series vehicles have been shipped in more than 30 countries worldwide.
The Nigerian deal comes on the heels of a 200-unit order from A&M Garments in Kuwait for its Motiontrak 300P “black box” units that are deployed with patrol fleets. The systems track logistical information and record video of the environment around the vehicle.
T3’s low-speed, three-wheel cruisers are used by security guards, police officers, dock workers and others.
The company has raised about $40 million through private investments, venture capital and public offerings. T3 shares are traded on the American Stock Exchange.
