Lake Forest’s Western Digital Corp., the top maker of disk drives, on Tuesday reported results for the September quarter that showed a decline in profits.
Western Digital’s shares closed down 4% in a down day on Wall Street. The stock bounced back some in afterhours trading on a recent market of $7 billion.
For the three months through Oct. 1, Western Digital reported sales of $2.4 billion, up 9% from a year earlier and just ahead of analysts’ expectation of $2.35 billion in revenue.
The company posted $197 million in profits, down 32% and beating analysts’ estimate of $186 million in profits.
Western Digital said it shipped 51 million drives during the quarter, up 16% from the year-ago quarter.
It appears that the company got hit by falling prices for drives, which squeezed its profits.
Western Digital and others saw weak demand for computers during the back-to-school shopping season, which created a pileup of drives and pushed prices down.
“In a quarter characterized by aggressive industry pricing, we remained solidly profitable, grew revenues and unit shipments year-over-year, and generated $390 million in cash from operations,” Chief Executive John Coyne said. “Our low-cost business model and strong balance sheet enable us to weather the seasonality and cycles of the hard drive industry such as we experienced during the last two quarters.”
The company ended the quarter with nearly $3 billion in cash and short-term assets.
For the current quarter, analysts are expecting Western Digital to see profits of $213 million, which would show a decline of roughly 50% from a year earlier, on sales of $2.49 billion, a decrease of about 5%.
Western Digital’s drives go into computers, servers and consumer electronics.
Its top rival is Scotts Valley-based Seagate Technology LLC, which had a recent market value of $7.2 billion.
