Oct. 20 (Bloomberg) -- Western Digital Corp., a maker of disk drives and networking products, expects a loss this quarter and forecast sales below analysts’ predictions as the worst flooding in five decades in Thailand hobbles production.
Excluding certain costs, the company will have a per-share loss of $1.10 to $1.50 in the fiscal second quarter, which ends in December, Western Digital said yesterday on a conference call. Sales will be $1.05 billion to $1.25 billion in the period. Analysts projected profit of $1.04 on revenue of $2.58 billion, the average estimates in a Bloomberg survey.
Western Digital has shut two factories in Thailand, joining such companies as Honda Motor Co. and Canon Inc. that have closed about 1,000 facilities in the Asian nation ravaged by rising waters. It may take several quarters for Irvine, California-based Western Digital to resume normal production, Chief Executive Officer John Coyne said on the call.
“This is a disaster of unprecedented scale,” Coyne said on the call. “Full recovery will be a multi-quarter challenge.”
Western Digital may see exports from Thailand slide as much as 40 percent to 120 billion baht ($3.9 billion), Wannarat Charnnukul, the country’s industry minister, told reporters after meeting with company executives on Oct. 18.
The stock fell 5.9 percent in late trading yesterday. That extended an earlier 9 percent slump to $24.44 at the close in New York, for the biggest decline since Jan. 22, 2010.
Supply Chain Disruptions
Western Digital, which counts Hewlett-Packard Co., Dell Inc. and Acer Inc. among its customers, relies on its plants in Thailand for 60 percent of production, Wannarat said.
It may take the company between four and six months to resume full production, cutting Western Digital’s exports from Thailand by 80 billion baht, from 200 billion baht last year, the minister said. The company has a 33 percent share of the global hard-disk drive market, according to Wannarat.
Other electronics makers are being affected by the flooding. Seagate Technology Plc said on Oct. 12 that while all of its factories in Thailand are operating, the supply chain for the components that go into hard disk drives is being disrupted.
Together, Western Digital and Seagate account for about 64 percent of all hard disk drives globally, according to supply chain analysis by Bloomberg.
Seagate slipped 0.4 percent to $12.05.
--Editors: Niamh Ring, Tom Giles
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