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Technology Stocks : Western Digital (WDC)

WDC 168.90

+4.9%

Dec 5 3:59 PM EST

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To: Pierre-X who wrote (7689)	11/18/1997 8:56:00 AM
From: T Bowl	Read Replies (4) of 11057

<< Did anyone catch the conference call on Monday?>> More of the same really. Tried to project into Q3 and Q4. Difficult to hear because they were taking questions from the audience as well as the phone. But what I did get: For Q3 and Q4 Sounded like: - Units flattish in Q3 and Q4 over Q2(at the lower end(7.3mil). - accelerated MR schedule still same - Should see solid ESG growth. 9GB will become significant portion. - GMs same as Q2(10%) - ASPs trending down in PSG, but less aggr than Q2 - ASPs in ESG up due to 9GB shift - total expenses flat to maybe down. Trying to cut expenses - Taxes still 16% Other - trying to reduce finished goods. - no capexp changes - were real happy with head suppliers(esp RDRT, although not mentioned by name. They did call them the "major partner".They couldn't have ramped quickly without them. Mentioned specifically that IBM heads are good too and that one partner is in MR transition(APM)) - no plans to get into the heads biz - ESG will become major part of profits in Q3 and Q4. - at one point I think that they referenced $1.50 to $1.70 for FY98. But it was VERY unclear. He actually said 150 to 170 as estimate, but again, VERY unclear. Watch for potential decreases? - 7 of 10 laptop manus have designed in the 3" slot - IBM not really a player in sweet spot desktop market, esp with the new GMR line. Too expensive and they are unsure that it is possible to make it compete now. - talked some about SEG cutting production and Fujitsu(yes Fujitsu) delaying a plant. It was somewhat positive, but I was depressed with the Q3 and Q4 outlook. 10% GMs still. Yuck! Anyone else get the 150 to 170 read? todd

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