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Perry Rod




04/23/09 at 5:50 PM CDT



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Western Digital Guides For Higher Profit

A day after its biggest competitor, Seagate Technology, reported earnings in line with their guidance, Western Digital handily beat the average of fourteen analyst revenue and earning estimates this evening.  Even the highest estimate of .23 was too low, as Western Digital said it earned .30 before certain expenses.  The hardware maker's executives also noted in a conference call that they expected to post higher revenue and earnings than that of the current average analyst consensus for their next quarter, which was .15.  Western Digital's CFO Tim Leyden guided for earnings between .16 and .26 after certain expenses.

The announcement may have been overshadowed by earning reports from Microsoft and Amazon, among others.  WDC was lightly traded in the after market, with the majority of shares trading at around 22.80, up 4.4%.  Before the report, analysts were expecting full year earnings of $1.75.  Estimates had been rising steadily in the last few months, as company executives and analysts have been suggesting that the hard drive industry may have bottomed in the first calandar quarter of 2009.  Indeed, times have been so tough for major hard disk makers that Western Digital may be the only profitable company in the industry at this time.  Analysts for Seagate, whose shares were also up after hours, are forcasting a loss of .75 for the year and continued negative earnings for the following year.

Western Digital CEO John Coyne also suggested during the company's conference call that the company is increasing market share due to suffering and consolidation of the industry.

With 1.6 billion in cash, which is up 16% over the prior quarter, and a potentially better outlook for the full year, look for Western Digital to get some attention in Friday trading.

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