Last year's flooding disaster in Thailand put a crimp in hard drive manufacturing, as roughly 40% of all drives move through the area on their way to store shelves. Tight supplies led to rising prices, and Seagate already showed exactly how profitable the new environment can be.
Wall Street analysts expect Western Digital to follow the same pattern. Earnings are expected to jump 134% year over year to $1.55 per share on 7% higher sales of $2.4 billion. The company has stunned analyst targets in each of the last three quarters, but these estimates appear to take the new pricing environment into account.
The recovery and rebuilding of the supply chain continues. Western Digital expects to get back to 60% of its pre-flooding production levels in this quarter and 100% in another two quarters. But the high Street prices should linger even beyond that as the computing industry rebuilds depleted inventory buffers. Look for a fresh update on the production and demand situations alongside the raw numbers.
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