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Technology Stocks : Disk Drive Sector Discussion Forum -- Ignore unavailable to you. Want to Upgrade?

To: xamir who wrote (3568)	6/9/1998 4:42:00 PM
From: Mark Oliver	Read Replies (2) \| Respond to of 9256

Looks pretty negative. Is this industry, or WDC having problems? Chuck Haggerty, chairman, president and chief executive officer of Western Digital, said: "Despite the reductions in finished goods inventory that we saw among industry leaders last quarter, there remain too many drives in the distribution channel. This has caused a further acceleration of desktop pricing pressure in the channel and at OEM customers in the June quarter." Loan defaults. This is coming from a company that was suppose to have so much cash. The size of the Company's expected fourth quarter net loss will result, unless cured, in a technical default under the Company's bank credit line at the end of the quarter. The total available credit under the bank agreement is $250 million, of which $50 million is outstanding in the form of a term loan. The Company's borrowing capacity will be subject to the successful re- negotiation of the terms of the credit line agreement. The Company is currently in discussions with its lenders about these matters. Exactly how far along are they with their MR transition? Is this problem exasperated by inferior product? Maybe they are loosing market rather than the market is in trouble? The Company also reported that major OEM customer acceptance of its first and second generation MR head products and of its future product roadmap for both desktop and enterprise drives was very strong. "The plan is in place, and progress is being made, to return Western Digital to time-to-market leadership in the desktop business," Haggerty said. "Our initial MR head programs are establishing a strong base of performance with our strategic OEM customers as we head into the new fiscal year. In the meantime, our Enterprise storage business continues to perform profitably." What a drag. Regards, Mark

To: xamir who wrote (3568)	6/9/1998 6:48:00 PM
From: T Bowl	Read Replies (2) \| Respond to of 9256

Was this WDC announcement a surprise? I don't think so. Remember the KMAG announcement last week which said: <<Several customers recently lowered their orders for our disk products in response to downward adjustments in their hard disk drive production build schedules. >> The adjustments to build schedules certainly did not come from Maxtor. KMAG expected the rebound in the JunQ to come from orders out of WDC IMO. It looks like WDCs rebound didn't come; It even got cut back since the MarQ98 CC. Remember who else called the bottom and expected to see a bounce in rev this Q? Arr Dee Arr Tee todd