Shares of Lake Forest’s Western Digital Corp., a maker of disk drives, jumped after the company reported December quarter profits that were down from a year earlier but beat Wall Street analysts’ lowered expectations.
Investors bumped shares up 4% in afterhours trading on a recent market value of about $3 billion.
Excluding charges for income tax, severance pay and other costs, Western Digital posted profits of $123 million, down 60% from a year earlier and handily beating analysts’ expected $69 million in profits.
Including charges, Western Digital recorded $14 million in profits.
For the three months through December, the company reported sales of $1.8 billion, down 18% from a year earlier and in line with expectations.
Western Digital got hit by a double whammy: Demand for its drives is falling as consumers pull back their spending on things such as laptops and external storage devices. It’s also getting squeezed by lower prices for laptops.
In December, Western Digital said it’s cutting some 2,500 jobs and slashing executive pay in a bid to offset slumping demand.
“Against a backdrop of unprecedented global economic turmoil and a rapid intra-quarter falloff in demand for hard drives, WD acted swiftly to align production and operating expenses with significantly lower-than-originally planned unit volumes,” Chief Executive John Coyne said.
The company ended the quarter with $1.4 billion in cash and short-term assets.
Western Digital said it shipped some 36 million drives during the quarter, up slightly from 34 million it shipped in the same quarter a year earlier.
The company didn’t give an outlook for the current quarter.
For the March quarter, analysts are expecting profits of $31 million on $1.5 billion in revenue.
