Western Digital Gains After Raising Revenue ForecastXu Wang and Nick Turner
Western Digital Corp climbed the most in more than four months after the California-based maker of disk drives and networking products raised its quarterly revenue forecast, citing its recovery from flooding in Thailand.
Western Digital climbed 7.5 percent to $31.44 at the close in New York, the biggest gain since July 22. The stock, which is down 7.3 percent this year, was the top performer in the Standard & Poor’s 500 Index.
Revenue will be at least $1.8 billion in the December quarter, the Irvine-based company said in a statement yesterday. In October after flooding in Thailand had devastated factories and constrained supplies, Western Digital predicted sales of $1.05 billion to $1.25 billion. The company resumed hard-drive production in Thailand this week, “well in advance of our earliest expectations when the floods hit,” Chief Executive Officer John Coyne said in the statement.
“The recovery seems to be ahead of schedule,” Mark Miller, an analyst with Boca Raton, Florida-based Noble Financial Group, said in a telephone interview today. “And a good part of the stronger sales is also from the higher prices.” He has a “hold” rating on the shares.
Western Digital joins rival Seagate Technology Plc in signaling this week that the industry is recovering from the disaster. The floodwaters engulfed much of the industrial heartland north of Bangkok, sidelining production of disk drives and components. Western Digital was hit worse than Seagate, whose factories weren’t directly affected.
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