Western Digital lowered its forecast for the first fiscal quarter ending September 30. The guidance report on the quarter inflicted the stock that was 3 percent down at the end of the week Friday.
The company has lowered its forecast on sales from $4.2-$4.3 Billion to $3.9-$4 Billion due to the lack of demand in the overall international market. The technology sector has been taking huge blows on sales and eventual profitability because of aching international economy. The demand in the US and Europe has been down due the Euro debt woes.
The company also brought unit sales down from previously predicted 157 Million to 140 Million due to the same reasons.
The report comes at heels of recent report from biggest chip making company in the world, Intel. The company lowered chip sales down this year because of lacklustre sales performance from ultrabooks, a new endeavour undertaken by Microsoft and Intel together.
FBN Securities analyst Shebly Seyrafi reduced the rating on WD stock from out perform to sector perform.
“We did perform channel check research (Thursday) and it appears that pricing has become materially worse with demand in the second week of September being slower than the first week and much slower than typical,” Seyrafi wrote in a research note.
The report from market leader is also expected to tax the performance of its direct competitor Seagate. Seagate’s share were down 1.2 percent though they are already going downhill for some time now.
“Unit shipments at Seagate could be 60 million instead of our current modelled 66 million units and suggests that Seagate’s revenue for its September quarter may be $3.6 billion to $3.7 billion instead of consensus of $4.1 billion,” he wrote.
Seagate and Western Digital sales took a hit last year this same period when the monsoon flood hit their Thailand-based plants. Seagate was the least affected. Western Digital took severe blow but recently came out of the production woes.