April 24, 2013 / 8:40 PM / 6 years ago

Western Digital forecasts strong revenue on internet storage demand

(Reuters) - Hard disk drive maker Western Digital Corp forecast current-quarter revenue largely above analysts’ expectations as higher demand for internet storage more than offsets the effects of a fall in personal computer sales.

A Western Digital Corporation hard drive is pictured in Encinitas, California April 19, 2011. REUTERS/Mike Blake

The company forecast fourth-quarter earnings of $1.65 to $1.80 per share on revenue of $3.55 billion to $3.65 billion.

Analysts on average were expecting earnings of $1.74 per share on revenue of $3.58 billion, according to Thomson Reuters I/B/E/S.

Hard drive sales have been hit as consumers buy fewer personal computers and increasingly shift to smartphones.

Technology tracking firm International Data Corp said earlier this month that PC sales fell 14 percent in the first three months of the year, the biggest decline in two decades of keeping records.

Western Digital, which dominates the hard disk drive market along with Seagate Technology Plc, however, said it expected a 3 percent unit growth rate in hard drives.

“It appears the hard drive business is not suffering as much. That is because of the growth of the cloud and digital data,” Noble Financial Capital Markets analyst Mark Miller said.

The demand for storage is growing at the rate of 30 percent annually, Miller added.

The company counts Hewlett-Packard Co as its top customer.

Net income for Western Digital fell to $391 million, or $1.60 per share, in the third quarter, from $483 million, or $1.96 per share, a year earlier.

Revenue rose 24 percent to $3.76 billion.

Excluding items, it earned $2.10 cents per share.

Analysts on average had expected earnings of $1.77 per share on revenue of $3.61 billion.

Hard disk drive shipments rose 36 percent to 60.2 million units.

Western Digital shares were up 3 percent in extended trading after closing at $52.90 on the Nasdaq on Wednesday.

Reporting by Supantha Mukherjee in Bangalore; Editing by Maju Samuel and Don Sebastian

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