Shares of Lake Forest-based disk drive maker Western Digital Corp. were off more than 9% at the close of New York trading Friday on concerns about falling drive prices and the impact on profits.
The decline comes after Western Digital reported strong results for the March quarter and gave a positive outlook for the current one.
The company has a market value of about $6 billion.
Western Digital said it saw prices for drives fall at the end of last month, with “greater than anticipated pricing action.”
The company also stopped production in the last week of March “to balance our supply with demand.”
Western Digital has seen a bullish run in the past year on steady sales, prices and supplies of drives. The industry is known for periodic price wars and gluts that can cause havoc on already slim profits.
Earlier this month, industry leader Seagate Technology LLC blamed a decline in quarterly revenue on price cuts by Western Digital and Hitachi Ltd.
For the March quarter, Western Digital saw profits more than double from a year earlier and revenue jump by 50% The company saw quarterly profits of $280 million, up from $121 million a year earlier.
Sales went from $1.41 billion to $2.11 billion.
The results handily beat Wall Street expectations.
For the current quarter, Western Digital sees a profit of $171 million to $184 million on revenue of $1.8 billion to $1.9 billion.
Analysts, on average, expect a profit of $162 million on sales of $1.87 billion.
