Irvine-based disk drive maker Western Digital Corp. expects continued pressure on costs in the current quarter, driven by supply constraints and rising transportation costs.
“Price declines are expected to be moderate while cost pressures will continue, driven by a rare earth materials, logistics costs and foreign currency exposures,” finance chief Wolfgang Nickl recently said in a conference call with investors and analysts. “We will continue to work internally and with our supplier partners to find ways to offset these cost challenges.”
Western Digital forecasts the overall market will see 170 million to 175 million disk drives available in the September quarter, based in part on inventory built up.
The company said it shipped 54 million drives in the June quarter, up 8% from a year ago.
Inventory Western Digital built up heading into this quarter could translate into more sales, according to Nickl.
“We believe that some of that inventory buffer that’s in there would allow the growth that we are looking at, which is somewhere in the region of about 5% or so,” he said.
Look for Western Digital to push added storage and backup drives on existing PCs for the consumer market as it tries to add market share.
“There’s still way, way too many people out there totally exposed in terms of backup,” Chief Executive John Coyne said during the conference call. “Now if we can do an effective marketing job of convincing people that not only do they need that incremental storage, but they need to back it all up, then we have an even brighter future out there to go turn that opportunity into financial performance.”
Western Digital projects revenue in the September quarter to be in the range of $2.4 billion to $2.5 billion.
Analysts on average are expecting revenue between about $2.3 billion and $2.6 billion.
Adjusted profits are projected to fall between $209 million and $232 million.
Analysts are expecting adjusted profits between $169.5 million and $274.2 million.
Western Digital’s recent performance and near-term outlook has topped Scotts Valley-based rival Seagate Technologies LLC.
Western Digital beat Wall Street expectations for the June quarter while Seagate trimmed its sales and earnings outlook amid margin concerns for the current quarter.
Much of the difference appeared to stem from Western Digital’s success in meeting stronger-than-anticipated demand in the June quarter.
CoreLogic Adds Folino
Paul Folino, the executive chairman of Emulex Corp. in Costa Mesa, will step down from that post in late November and likely remain chairman, the company announced last week.
The move is another step in the company’s transition plan that’s played out in the last year.
Emulex bumped up Jeff Benck to the president’s post last September, positioning him in the No. 2 spot behind Chief Executive Jim McCluney.
McCluney had served as chief operating officer under former chief executive Folino, who recently joined the board of directors of Santa Ana-based CoreLogic Inc., a data provider for real estate and mortgage companies.
“Paul has been a driving force at Emulex for 18 years and is an acknowledged business leader in information technology,” said CoreLogic Chairman D. Van Skilling.
Emulex makes adapter cards, switches and other gear that speeds up data flow on corporate storage networks. Its customers include Apple Inc., Cisco Systems Inc., Dell Inc., IBM Corp. and Oracle Corp.
Folino is credited with growing the company into a major player in electronics for data storage networks.
He joined Emulex as chief executive and added the title of chairman in 2002.
He became executive chairman in 2006.
Folino also serves on the board of Irvine-based chipmaker Microsemi Corp.
Angels’ Tablet
Los Angeles Angels of Anaheim fans looking to get their gadget fix at the ballpark can now rent tablets for $10.
Bellevue, Wash.-based T-Mobile USA Inc., the wireless division of Deutsche Telekom AG, rolled out the campaign July 21, treating local reporters and other VIPs to a game in the owner’s suite, a tour of Angel Stadium of Anaheim, and a chance to test out T-Mobile’s G-Slate tablet and the Samsung Galaxy Tab.
Sadly, this reporter was on deadline that day and missed the festivities.
The T-Mobile tablets are decked out with lots of extra content, including T-Mobile TV.
Fans who rent the tablets receive a game-day program via the tablet, free content from San Francisco-based Zinio LLC’s magazine app of more than 4,500 titles, free T-Mobile TV (on the T-Mobile G-Slate only) and high-speed Internet connections.
T-Mobile began its partnership with the Angels at the beginning of the season and has been fine-tuning its network inside the stadium since then. It ran a beta program with fans who provided feedback on the service before rolling out the initiative, according to company officials.
“There’s no question that baseball fans love stats, replays, MLB news and more,” said Angels Chairman Dennis Kuhl. “We wanted to enhance the fan experience while viewing home games.”
The Federal Communications Commission is weighing a $39 billion take-over bid from AT&T Inc. to buy T-Mobile USA.
If the deal is approved, it will create the country’s largest wireless carrier.
