Shares of Lake
Forest-based disk drive maker Western Digital Corp. jumped after the close
of New York trading on Wednesday after the company’s top rival, Scotts
Valley’s Seagate Technology LLC posted better than expected results for the
shares rose 5% in after hours trading on a recent market value of around $10
For the three months through Jan. 1,
Seagate swung to a profit of $533 million compared with a loss of $2.8
million a year earlier.
Revenue rose 33% to $3.03 billion.
“Our strong financial performance in the
December quarter was the result of our ongoing progress in driving
operational efficiencies, our leadership position in high capacity, high
performance products, an improved product mix and the overall strength of
demand for digital storage,” Seagate Chief Executive Steve Luczo said in a
The news bodes well for Western Digital,
which is set to report results on Thursday.
Analysts, on average, are expecting Western
Digital to post profits of $307 million on sales of $2.4 billion.
Unlike Seagate, the biggest maker of disk
drives, Western Digital didn’t miss a beat during the downturn of the past
year or so.
As corporations and consumers suddenly
stopped spending on technology, Western Digital swiftly cut jobs, pared
executive pay, slowed production at factories and slashed other costs.
Seagate ended up bearing the brunt of the
downturn with its focus on drives for personal computers and servers. Drives
for laptops and consumer electronics cushioned the blow for Western Digital.
Western Digital surpassed Seagate in the
industry’s fastest-growing category—drives that go into laptops and their
smaller cousins, netbooks. It’s neck-and-neck with Seagate for drives that
go into desktop computers.