Disk Drives: Another Day, Another Round Of Estimates Cuts
By Eric Savitz
* Monday, June 28, 2010 ET
blogs.barrons.com
The Street continues to trim June quarter estimates on the disk drive stocks amid signs of falling pricing and moderating demand.
Needham analyst Richard Kugele this morning noted in a research report that the industry “is likely very pleased to see the June quarter come to an end,” with sales down sequentially, though “far from the disaster feared.” He chops his prices targets to $34, from $40 for Seagate (STX), and to $59, from $68 for Western Digital (WDC), but maintains Strong Buy ratings on both stocks.
Kugele expects Seagate to post June quarter results at the low end of the guidance range of $2.85 billion to $3.05 billion at the top line with profits of 83-87 cents a share. He trims his forecast to $2.85 billion and 71 cents, from $3 billion and 85 cents. For the June 2011 fiscal year, he goes to $3.44, from $4.04.
For WDC, his new June quarter estimate is $2.45 billion and $1.34, down from $2.55 billion and $1.47; for the June 2011 fiscal year, he now sees $5.85, down from $6.67.
Meanwhile, Roth Capital analyst Arnab Chanda today repeats his Hold rating on Marvell (MRVL), while trimming his estimates on the chip maker due largely to the fact that the company’s business with the hard-drive sector is tracking towards the low end of guidance. For the fiscal second quarter ending July, he goes to 40 cents, from 41 cents. For the January 2011 fiscal year, he now sees $1.62, down from $1.60; for FY 2012, he goes to $1.65, from $1.70.
In today’s trading:
* STX is up 27 cents, or 2%, to $13.95.
* WDC is off 21 cents, or 0.7%, to $31.57.
* MRVL is down 30 cents, or 1.7%, to $17.07.
Previously:
* Disk Drives: Barclays Trims Growth View; Cuts STX, WDC Ests (June 25, 2010)
* Drive Stocks Stumble As Price Declines Reportedly Accelerate (June 24, 2010)
* Disk Drives: Caris Cuts STX, WDC Ests On Weaker Drive Sales (June 15, 2010)
* Seagate: RBC Cuts Estimates, Targets On Eroding Drive Prices (June 7, 2010) |
