Goldman Sachs Reports High EPS and Low Shipment Estimates for Western Digital

According to a recent research report published by Goldman Sachs, Western Digital Corp.

is seeing near-term constraints that continue to sharply boost HDD prices. In the report, Goldman Sachs commented, “Western Digital reported non-GAAP EPS of $1.51, above our estimate of $0.69 and consensus of $0.71, driven by ASP and gross margin upside. The company's unit shipments and its TAM estimate came in below our estimates, suggesting near-term constraints were even more severe than we anticipated. While WD's recovery is on track, production will remain below normal levels throughout the first half of 2012. We continue to believe the industry will begin to normalize in the June quarter, but WD does not expect to reach full capacity until the September quarter, so pricing could remain well above trend-line levels through the first half.” Goldman Sachs remains not rated on shares of Western Digital, which closed yesterday at $34.71.