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Western Digital Hikes Targets

Shares rise on an upbeat forecast.

SAN FRANCISCO -- Hard disk-drive makers are continuing to reap the gains of buoyant demand, greater control over component prices and restrained production.

For the second time in consecutive quarters,

Western Digital

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raisedits financial forecasts. Citing strong demand, steady pricing and lowinventories, the company said on Wednesday morning that it expects toearn $1.02 to $1.06 a share, excluding one-time items, on revenue of$2.03 billion to $2.08 billion in the second quarter.

The new estimates are sharply higher than the company's previousOutlook, as well as analysts' expectations of 77 cents a share onrevenue of $1.9 billion, according to Thomson Financial.

The announcement follows bullish remarks from Bill Watkins, chiefexecutive of hard disk-drive maker

Seagate Technology

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. At a CreditSuisse event last week, Watkins told investors that continueddemand for hard disk drives used in personal computers, business-storage devices and digital-video recorders for home televisions haskept inventories below expectations and propped up pricing power.

In addition to strong demand, the industry is benefiting fromrestrained output from Asian conglomerates, namely



, whosehard-drive unit has lost money through heavy production aimed atgaining market share.

Together, Seagate and Western Digital hold about 57% of the market.

Shares of Western Digital were recently rising $2.45, nearly 9%, to$30.68. The news also helped Seagate shares, which gained $1.10, or more than 4%, to $26.70.