Western Digital Shares Tank Thanks to Poor Outlook
How does a company manage to report solid profits for the third quarter, yet still see its shares tank in the pre-market session? Just ask Western Digital (NYSE: WDC).
WDC reported profit of $483 million, or $1.96 per share, well up from the year ago profit of $146 million, or 62 cents per share. Revenue shot up to $3.04 billion from $2.35 billion last year in the same period. That number kills analyst expectations of $2.46 billion.
CEO John Coyne said that, "Our third quarter performance demonstrates the potential of the new Western Digital, with just three and a half weeks of HGST results combined with the standalone WD business. Competing in the marketplace with our separate WD and HGST subsidiaries, we now have the product portfolio, technology resources and the people to fully serve the needs of a significantly expanded customer base and to better address the tremendous growth opportunities in the storage industry in the years ahead." So where did it go wrong? Higher prices in the drive industry in the wake of the floods in Thailand are playing havoc with supply and demand, leading to an unpredictable outlook for the coming months.
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