Jan. 24 (Bloomberg) -- Western Digital Corp. rose the most in seven weeks after reporting fiscal second-quarter sales that topped analysts’ estimates, citing “substantial progress” in recovering from flooding in Thailand that hurt production.
Shares of Irvine, California-based Western Digital gained 6.3 percent to $36.88 at the close in New York, the most since Dec. 2. The shares lost 8.7 percent last year.
On a conference call to discuss the results yesterday, Chief Financial Officer Wolfgang Nickl forecast third-quarter earnings, excluding some costs, of $1.15 to $1.45 a share, which also topped the average analysts’ estimate of 90 cents.
“They should be in a position to make a lot more money going forward, especially in the September quarter,” Rajesh Ghai, a San Francisco-based analyst at ThinkEquity LLC, said yesterday in a telephone interview. “It’s really a sign that the hard disk-drive industry is on very strong footing at this point and time and has clearly overcome the supply-demand imbalance that it had in the past.”
While sales fell 19 percent to $2 billion in the three months ended Dec. 30, the total topped the average estimate of $1.84 billion in a Bloomberg survey of analysts. Net income declined 36 percent to $145 million, or 61 cents a share.
Western Digital’s ability to make disk drives was impeded last year after the worst Thai flooding in seven decades devastated factories in the Asian country.
“While much work remains to be done over the next several quarters to reach our pre-flood manufacturing capabilities, the progress thus far is significantly ahead of our original expectations,” Chief Executive Officer John Coyne said in a statement.
Western Digital expects to complete the acquisition of Hitachi Global Storage Technologies by March, according to the statement.
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