Considering the ongoing muted PC demand, hard disk maker
Western Digital Corporation
) has been compelled to cut its sales and total available market
(TAM) forecast for its fiscal first quarter.
Currently, the company expects revenues to be in the range of
$3.9 billion to $4.0 billion, which is substantially down from the
previous revenue estimate of $4.2 billion to $4.3 billion.
The estimate revision from the hard disk manufacturer comes as
no surprise since rival
) and chip maker Intel (INTC) also lowered estimates recently for
the same reason.
Western Digital expects the weakness in PC demand to have a
significant impact on the overall market for hard disks. The
company currently expects quarterly shipment to drop to 140 million
units from 157 million guided previously. Of course we expect
improved mix from the addition of Hitachi's Global Storage
Technology business to have a positive impact on the gross
Many industry experts are slowly revising their expectations
downward based on the weak demand for PCs.
The company's international business and the overall demand for
its products are gradually improving however, owing to which it is
expected to generate better revenue going forward.
This apart, the Hitachi deal is expected to strengthen its
foothold in the data storage business. Although the company has
been able to handle competition efficiently, competition from
Seagate Technology plc
keeps its on its toes.
The company has a Zacks #2 Rank (implying a short-term Buy
SEAGATE TECH (STX): Free Stock Analysis Report
WESTERN DIGITAL (WDC): Free Stock Analysis
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