Western Digital Pops on Boosted Revenue Outlook
Western Digital Corp. (NYSE:WDC) raised its revenue outlook for the current quarter as it restarted production at a Thailand facility a week ahead of schedule after devastating floods forced it to shut down in October.
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The hard-disk-drive maker was forced to suspend operations in Thailand, where it typically makes about 60% of its products, after flooding left buildings and equipment at its production facility under as much as six feet of water.
Late Thursday, Western Digital announced that it had restarted one facility’s operations a week ahead of schedule. Though other operations remain under about two feet of water, they are expected to be pumped dry within 10 days, then decontaminated, refurbished, and brought back into commission.
The company raised its revenue forecast for the current quarter to at least $1.8 billion, up from its October range of $1.05 billion to $1.25 billion. Shares climbed as much as 12 percent in early morning trading, and were trading at $31.50 apiece as of 2:40 p.m. EST.
Western Digital has made “substantial progress in partially restoring our operations in Thailand, well in advance of our earliest expectations when the floods hit,” President and Chief Executive John Coyne said in a statement. “Much work remains to be done, but we couldn’t be more pleased with the effort and results thus far.”
Smaller rival Seagate (NASDAQ:STX) was less impacted by the flooding, and as a result, is expected to overtake Western Digital as the industry’s largest produced by shipments this quarter.
Seagate raised its revenue forecast for the quarter on Monday, saying it expects pricing for hard-disk drives to remain elevated through 2012. Flood-related shortages led to a surge in demand that allowed manufacturers to command sharply higher prices.
Seagate’s shares were down 7.10 percent today as of 2:40 p.m. EST.