Western Digital and Seagate lower their revenue expectations for the current quarter

Saturday, September 22nd, 2012 5:28:07 by

Western Digital and Seagate Technology announced their expectations for the current quarter ending September 30. Both companies lowered their estimations on sales and shipments due to lack of demand in global market.

Western Digital and Seagate are the suppliers of hard disc drives to PC makers and also sell the storage products as standalone sells. Their also provide storage supplies on enterprise level. However, their domain is the PC business. Their accumulative market share is about 80 percent in the global market.

Seagate remained comparatively optimistic in expected revenues and shipments. The company analysts speculate revenues to drop 5 to 7 percent in the September quarter, below $4 Billion target previously suggested. Moreover, their expectations on hard drive shipments are 10 percent lower than before. The company said that the total number of hard drives shipped this quarter is guessed to range from 140 Million to 143 Million.

WD, on the other hand, had a straight-forward 140 Million units shipment this quarter.

“Seagate appears to be more optimistic than Western Digital currently,” wrote equity analyst Shebly Seyrafi at FBN Securities, in a research report Friday.

“This could be partly because Western Digital is busy running two separate entities,” he said.

Seyrafi was referring to Western Digital’s latest acquisition of Hitachi Global Storage Technologies.

Both companies are the market leaders. Seagate was recently atop the list for a short while. However, Western Digital resumed its normal top spot after recovering completely from the flood damages it incurred last year from Monsoon floods in Thailand.

Seyrafi still suggests “outperform” rating on Seagate, with a price target of $32 to $35. STX shares are trading around $31 at the moment.

“Still, investors should be mindful that pricing has indeed become more aggressive recently,” he wrote.

Seagate expects the hard drive market to grow at a compound incremental rate of 5 percent for the coming few years.


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