Troubled data storage maker Western Digital Corp. (NYSE: WDC) said Wednesday that operating results for the third fiscal quarter ended March 31 would top Wall Street's estimates.
Shares closed at 6 7/16 Tuesday, having recovered from a low of 2 3/4. Western Digital hit a low after it said it would miss estimates in its first quarter, after also reporting a wide loss in its fourth quarter.
First Call was expecting the company to report a loss of 42 cents a share, according to the consensus estimates of 11 analysts. Western Digital said it plans to report about half that amount; net loss before non-recurring items is expected to be in the range of $27 million to $34 million, or 20 to 25 cents a share.
Western Digital also said new venture activities accounted for about one-third of the forecasted operating loss for the third quarter. The new ventures include Connex and SageTree, subsidiaries in the network attached storage and data warehousing markets. Connex began shipping its N3000 network attached storage product in the March quarter.
"Our total focus on the personal storage side of the hard drive business is yielding strong results," said CEO and president Matt Massengill. He added that restructuring efforts have improved efficiencies, and reasonable industry demand and pricing in the March quarter has helped cut losses.
Competitor Maxtor's (Nasdaq: MXTR) positive outlook was a harbinger of good news for Western Digital. Maxtor said it had strong demand and a higher than average selling price for its products.
Other competitors Quantum (NYSE: HDD) and Seagate (Nasdaq: SEG) have also performed in tandem with Western Digital in the data-storage industry.
Final results for the third quarter will be reported after the market close on April 27.
How low can Western Digital go?