Joan and all:
An interesting point to ponder. As we know, SEC relaxed it's stringent rules about companies issuing forward looking statements in 1996. From where I am sitting I have noticed a lot of companies to give misleading statements in the cover of new SEC rules. Take for example, Western Digital. I have to rate that management among the most cunning and completely dishonest.
See for yourself:
This is from their latest PR (12/2/97):
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SOURCE: Western Digital
Western Digital Announces Actions to Address Industry's Sustained
Oversupply and Aggressive Pricing Conditions
Sharpens Focus on Desktop, Enterprise Storage; Second Quarter, Full-Year Forecasted Operating
Results Impacted
IRVINE, Calif., Dec. 2 /PRNewswire/ -- Western Digital Corporation (NYSE: WDC - news) today announced a series of actions designed to lessen its exposure to sustained oversupply and higher-than-normal competitive pricing pressures in the hard drive industry's distribution channel and to sharpen the Company's focus and resources on its desktop and enterprise storage businesses. The Company will:
--further reduce production of desktop hard drives from previously announced levels;
--further accelerate its transition to desktop and enterprise hard drives featuring magneto-resistive head technology;
--exit the 3-inch portable hard drive business and re-deploy resources into its leadership desktop storage business and the expanding opportunity in its enterprise storage business; and
--plan to take one-time charges in the second quarter totaling in the range of $85-$95 million.
The Company had previously announced plans for a one-time charge of between $15 to $30 million associated with its accelerated transition from production of drives with thin film heads. This charge has increased to $85-$95 million, primarily due to a further reduction of unit volumes of desktop hard drives with TFI heads and from the Company's decision to exit the 3-inch portable hard drive business.
Impact on Operating Results
As a result of the continued pricing pressures and the reduction in unit volumes of desktop drives, the Company indicated that its currently-forecasted operating results (before the planned one-time charges) would be break-even for the second fiscal quarter ending December 27, 1997 and modestly profitable for its full fiscal year.
Western Digital indicated that the yields, production ramp, and customer acceptance of its new desktop and enterprise hard drives featuring MR heads were progressing extremely well. Based on the Company's revised build plans, its production of hard drives with MR heads will exceed 75% of total drives shipped as the Company exits the June, 1998 quarter.
Chuck Haggerty, chairman, president and chief executive officer of Western Digital, stated: ''The conditions leading to our current financial performance have been painful in the near term. We are taking the lead in further reducing production volumes in response to oversupply in the distribution channel and extremely aggressive pricing, principally by Japanese and Korean competitors. We intend to maintain our position as one of the world's most efficient suppliers of high-quality disk drives to leading PC and Enterprise- class customers. These steps--production cutbacks, accelerated transition to MR head technology and sharpening our focus and resources -- will better enable us to prosper sooner once the current industry cycle runs its course.''
This release contains forward-looking statements based on current management expectations, including statements related to current and anticipated industry supply and pricing trends, the transition from thin film to MR, the planned exit from the 3-inch portable hard drive business, the estimate of the planned one-time charges, and projected operating results. The forward looking statements are based on current management expectations, and actual results may differ materially as a result of several factors, including: pricing trends and other competitive factors, including overall supply in the hard drive industry; success in the accelerated transition to magnetoresistive-head drives; business conditions and growth in the personal and enterprise computing industry; changes in customer order patterns, successful reductions in future costs and expenses, and other factors discussed in our form 10-K for the year ended June 28, 1997, our form 10-Q for the quarter ended September 27, 1997, and our other SEC filings. Western Digital undertakes no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of such statements.
SOURCE: Western Digital
This is what they said about one month ago:
Friday November 7, 7:32 pm Eastern Time
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Western Digital Sees 2Q FY 98 Results Below Analysts' Expectations
WESTERN DIGITAL CORP. Sees Fiscal 1998 Second Quarter Results Below Analysts' Expectations
Nov. 7, 1997, Western Digital Corp. (NYSE:WDC - news) said it expects to report earnings in the range of $0.20 to $0.30 per share for its fiscal 1998 second quarter. The company said analysts were expecting $0.83 per share. WDC said its earnings estimate for the quarter does not include ''potential non-recurring charges'' in the range of $15,000,000 to $30,000,000 that the company is ''considering'' recording.
WDC said the possible charges would result from the company's phase-out of thin-film head products in favor of hard drives featuring newer magneto-resistive heads.
For the second quarter of fiscal 1997, WDC reported net income of $64,229,000, or $1.36 per primary share, on revenues of almost $1.12 billion.
WDC said its fiscal 1998 second quarter results will ''be impacted by significantly higher-than-normal competitive pricing pressures'' in the desktop hard-drive business, as well as ''product mix and cost issues'' associated with the company's last desktop drives with thin film inductive head technology. The company noted that its unit volumes for the fiscal 1998 second quarter are expected to be about 7,300,000 to 7,500,000, ''reflecting continued strong demand'' for WDC's desktop and enterprise hard drives.
This is what they said with the last Q earnings warning:
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Monday September 29 4:38 PM EDT
Company Press Release
Western Digital Will Have Record First Quarter Unit Shipments; Profit
Gain Will Be Substantial, But Below Expectations
IRVINE, Calif., Sept. 29 /PRNewswire/ -- Western Digital Corporation (NYSE:WDC) announced today that it expects to report earnings per share for the September quarter in the range of $.63 to $.66, more than 80 percent above the year-earlier result but below analysts' consensus expectations. Greater than anticipated competitive pricing pressures eroded the Company's gross margin despite record unit shipments of 6.3 million hard drives. In the year ago period, Western Digital earned $.35 cents per share on revenue of $883 million and unit shipments of 4.9 million. The Company will report its first
quarter results on October 9.
Hard drive pricing significantly weakened in the quarter as a major competitor liquidated excess inventory in the distribution channel. Western Digital Chairman, President and Chief Executive Officer Chuck Haggerty stated: ''Pricing pressure in the latter part of the quarter was more than we could offset through higher mix and volume. Our attempts to change the product mix in the last half of September did not fully materialize.''
Haggerty indicated that Western Digital will adjust its production plan for the December quarter to help reduce the industry's excess inventories. He said: ''We will continue to act responsibly to maintain the great gains this industry has made. We will not seek market share gains at the cost of ruinous price competition, hence our decision to reduce production. This action is indicative of the industry's greater maturity and stability.''
Although the pricing pressures which affected gross margins in the first quarter will also impact subsequent quarters, current OEM customer forecasts for the seasonally strong December quarter indicate solid sequential growth in unit shipments, revenue and profitability for Western Digital, albeit at lower levels than previously planned.
On the new product front, Western Digital said it is shipping in volume its first two magnetoresistive-head drives-the 3.5 inch
6.4 gigabyte WD Caviar drive and the 3 inch 2.1 gigabyte WD Portfolio drive. The new WD Caviar drive leads the desktop segment of the industry in areal density, with 2.16 GB per platter.
Earlier today, Western Digital announced its third MR head implementation- a low-profile 9 GB WD Enterprise Ultra SCSI drive which will begin volume production in October. The Company indicated that its Enterprise business posted a substantial quarter over quarter increase in unit shipments.
This release contains forward-looking statements based on current management expectations; actual results could differ materially as a result of several factors, including: continued success in the ramp of volume production of magnetoresistive-head drives; continued successful qualification of such drives with key OEM customers; business conditions and growth in the personal and enterprise computing industry; changes in customer order patterns; competitive factors; and other factors listed in the Western Digital's Form 10-K for the fiscal year ended June 28, 1997, and its other SEC filings.
Western Digital undertakes no obligation to update forward-looking statements to reflect events or circumstances occurring after the date hereof.
SOURCE Western Digital Corporation
This is what they said with their July 24th Earnings release:
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"In what was clearly a challenging quarter for the disk drive
industry, we are very pleased to be able to report strong sequential
improvements in revenue, units, and profits for the fourth quarter,"
said Chuck Haggerty, chairman, president and chief executive officer of Western Digital. "Our disk drive business continues to outgrow the industry because of our crisp execution on the timing, performance, reliability, and quality of our products and services to OEM, distribution, and retail customers. Offering the PC industry the broadest array of performance EIDE drives -- combined with a sustained track record of execution -- has aligned us with top-tier OEM customers whose high-performance PC businesses are fundamentally strong."
"The results for fiscal 1996 are gratifying and reflect the focus
and dedication of more than 9,000 Western Digital employees worldwide," said Haggerty. "As we enter the new fiscal year, our PC desktop drive business is an industry pace-setter and we have laid the resources in place for entries into the enterprise and portable storage markets in the next several months. With the existing business operating at an annual run rate of $3.3 billion in revenue, we look forward to the contribution of these incremental businesses in fiscal 1997." |
