To: Jurgis Bekepuris who wrote (7650 ) 6/7/2010 10:16:36 PM From: Sam Read Replies (1) | Respond to Well, this HTCH news (see article below) can be taken in any of several ways: PC demand is not as strong as the forecast services (e.g., Gartner, iSuppli, etc) have suggested in recent months; or, demand is OK, but the drive guys have just put too many drives into the supply chain, overbuilding as some were saying they would do a few months ago; or, they are just exercising appropriate discipline by proactively staying on top of inventory issues and limiting future production so that their margins won't take a hit in Q3. Certainly, both WDC and STX have already taken a big hit over the past few weeks (not to mention HTCH and VECO, two other important vendors in the HD supply chain). So the question will be, has the hit they've already taken been enough? Seagate was expected to earn around $3.50 this year and $3.61 next, with the stock down to $14.52. If they only earn $3, is a PE of less than 5 appropriate? WDC is in the same ballpark: trading at 33.48, expected to earn 6.28 and 6.30.blogs.barrons.com
