Back to STX
Western Digital Predicts Softening Market for Disk Drives -- Seagate Shares Dip

NEW YORK, NY -- (Marketwire) -- 05/02/12 -- 2011 was an eventful year for the Data Storage Devices Industry as major floods in Thailand disrupted the production and supply chain of disk-drives. The lack of supply drove disk-drive prices higher and as a result increased companies' profits. But recent comments by Western Digital have many investors believing disk-drive prices will drop back to pre-flood levels. Five Star Equities examines the outlook for companies in the Data Storage Devices Industry and provides equity research on Seagate Technology PLC (NASDAQ: STX) and Western Digital Corp. (NYSE: WDC).

Access to the full company reports can be found at:

www.FiveStarEquities.com/STX
www.FiveStarEquities.com/WDC

Thailand is home to a large portion of the world's production of disk drives, flooding in Thailand began in late July and continued through the rest of 2011. Many production facilities were destroyed in the floods, and as a result created a shortage in supply. Seagate was one of the biggest benefactors of the flooding as the company's margins jumped 18 percent for fiscal Q2 and 27.5 percent in fiscal Q3. But Western Digital's fiscal Q3 report suggests that demand for disk-drives is slowing. The company forecasted the total worldwide market for drives this quarter to be between 155 million to 160 million units, well below street expectations of 170 million units. Western Digital CEO John Coyne recently stated that "prices are lower in the June quarter than they were in the March quarter."

Five Star Equities releases regular market updates on the Semiconductor Industry so investors can stay ahead of the crowd and make the best investment decisions to maximize their returns. Take a few minutes to register with us free at www.FiveStarEquities.com and get exclusive access to our numerous stock reports and industry newsletters.

Shares of Seagate fell by as much as 10 percent Friday after competitor Western Digital released its third quarter financial results. Seagate reported revenue for the third quarter of $4.4 billion, gross margin of 37%, and net income of $1.1 billion and diluted earnings per share of $2.48. On a non-GAAP basis, which excludes the net impact of certain items, Seagate reported net income of $1.2 billion and diluted earnings per share of $2.64.

Western Digital shares dropped nearly 15 percent Friday morning. The company reported revenue of $3.0 billion, hard-drive unit shipments of 44.2 million and net income of $483 million, or $1.96 per share, on a GAAP basis for its third fiscal quarter ended March 30, 2012. On a non-GAAP basis, net income was $619 million, or $2.52 per share.

Five Star Equities provides Market Research focused on equities that offer growth opportunities, value, and strong potential return. We strive to provide the most up-to-date market activities. We constantly create research reports and newsletters for our members. Five Star Equities has not been compensated by any of the above-mentioned companies. We act as an independent research portal and are aware that all investment entails inherent risks. Please view the full disclaimer at: www.FiveStarEquities.com/disclaimer

Add to Digg Bookmark with del.icio.us Add to Newsvine

Back to STX
Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki