Oct. 24, 2013, 4:17 PM
Oct. 9, 2013, 4:35 PM
- While the number isn't pretty, it's notably better than the 11.4% drop IDC estimated for Q2, as well as the firm's respective Q3 and full-year forecasts of -9.5% and -9.7%. Easier comps helped out a bit (shipments fell 8.6% Y/Y a year ago), as did "channel intake of Windows 8.1-based systems" in September. (PR)
- As was the case in Q2, U.S. and enterprise were areas of strength. U.S. shipments only fell 0.2%, and enterprise volumes saw a "slight uptick." But tablet cannibalization led Asia-Pac (exc. Japan) shipments to fall 8.8%. EMEA declined in-line with expectations, while Japan outperformed.
- The mix shift is a positive for H-P (HPQ - 27% U.S. share vs. 17.1% global share), Intel (INTC - higher ASPs), and Microsoft (MSFT - higher ASPs and less piracy). It hurts Lenovo (LNVGY.PK), but the Chinese firm was still the market's top vendor, and saw its global share rise 160 bps Y/Y to 17.3%.
- H-P was #2; its share rose 130 bps. #3 Dell, which has gotten more aggressive with its pricing, saw its share rise 90 bps to 11.7%.
- Apple's (AAPL) U.S. PC share, which has been rising in recent years, fell 140 bps to 11.6%; the enterprise mix shift and pending MacBook Pro/Mac OS X refreshes likely played roles.
- Other affected industry names: AMD, NVDA, MU, STX, WDC.
- Update: Gartner thinks shipments fell 8.6% Y/Y.
Sep. 30, 2013, 10:04 PM
- "We believe back to school PC demand has been virtually absent," says Sterne Agee's Vijay Rakesh in a critical note on Intel (INTC). Moreover, Sterne thinks high inventories and weak demand are pointing to the absence of a holiday season sales boost (normally 5%-7%) as well.
- Rakesh now sees PC sales falling 10.7% Y/Y in Q4, worse than a prior forecast for a 9.6% drop. He also questions the ability of smartphone/tablet CPU sales to offset declining PC CPU sales for Intel, given notebook processors typically sell for several times as much as their mobile counterparts. Oddly enough (given Nokia's limited smartphone share), Rakesh also suggests the Microsoft-Nokia deal is a negative for the chip giant.
- In August, IDC lowered its 2013 PC shipment growth forecast to -9.7% from a prior -7.8%. The firm estimates PC shipments fell 11.4% Y/Y in Q2 (Gartner is at 10.9%), and has predicted tablet shipments (aided by seasonality) will exceed PC shipments in Q4.
- Other PC industry names in the crosshairs: MSFT, HPQ, AMD, NVDA, MU, STX, WDC, LNVGY.PK.
Sep. 25, 2013, 5:40 PM
- Seagate (STX +5%) gradually moved higher over the course of the day after Longbow's Joe Wittine decided to put the company on his firm's Best Ideas list at the expense of archrival Western Digital (WDC +1.2%).
- WDC nonetheless saw moderate gains, perhaps in part because much of Wittine's commentary can be viewed as positive for the hard drive industry at-large.
- Wittine reiterates his belief the hard drive industry bottomed in 1H, and points out non-PC drive sales are eclipsing (slumping) PC drive sales thanks to strong enterprise/branded drive growth. He also sees Seagate and WDC's near-duopoly status allowing the companies to maintain a gross margin in the 27%-32% range, and let future capacity additions lag demand.
- He expects Seagate to continue producing $1.9B/year in free cash flow, and praises its valuation of 7.6x estimated FY14 (ends June '14) EPS.
- In spite of the PC industry's woes, both Seagate and WDC have done well this year.
- Earlier: Western Digital CFO leaving for ASML
Sep. 25, 2013, 4:53 PM
- Wolfgang Nickl, Western Digital's (WDC) CFO since Aug. 2010, is resigning, effective Nov. 17, to become the CFO of Dutch chip equipment giant ASML. '
- WDC points out the job change allows Nickl to rejoin his family in Europe. The hard drive maker says it has begun a search for a replacement. (PR)
- ASML says Nickl will start his new job on Dec. 1. The company has been without a full-time CFO since Peter Wennink was appointed CEO earlier this year. Wennink, who took over as CEO from chairman Eric Meurice, has been serving has as both CEO and CFO since July 1.
Sep. 19, 2013, 11:25 PM
Sep. 9, 2013, 10:26 AM
- Virident, like Fusion-io (FIO +11.3%), offers PCI-Express-based server flash memory modules meant for performance-intensive applications. And beaten-down Fusion-io has been the subject of plenty of M&A speculation over the last two years.
- Virident asserts its FlashMAX II PCI-Express modules offer 2x the performance of rival solutions.The company also provides FlashMAX Connect, an innovative software solution for allowing FlashMAX II modules to be clustered, to mirror/replicate content, and to act as caches for 3rd-party storage.
- Western Digital (WDC -0.5%) should be able to greatly expand Virident's distribution. The purchase comes less than 3 months after WDC announced it's buying enterprise SSD vendor sTec for $207M.
- In addition to Fusion-io, Virident competes against EMC, which offers its XtremSF flash modules and other flash storage products, and private flash storage system vendors such as Nimble Storage and Violin Memory.
- Interestingly, Western Digital archrival Seagate (STX -0.8%) recently invested $40M in Virident and struck a reseller deal with the company. Though Seagate is probably getting a good return on its investment, it can't be happy to see Virident fall into WDC's arms. Will it counter by making a play for Fusion-io?
- Previous: Western Digital buying Virident for $685M
Sep. 9, 2013, 8:29 AM
- Western Digital (WDC +0.6%) unit HGST has agreed to acquire Virident Systems, a provider of server-side flash storage products, in a deal worth $685M.
- The enterprise value of the transaction is $645M, net of Virident's estimated cash balance at closing.
- The acquisition extends HGST's presence in the market for corporate solid-state drives (SSD), which IDC forecasts will grow to $7B by 2017 from $2.5B in 2012.
- The deal is expected to close in Q4. (PR)
Aug. 29, 2013, 5:01 PM
- Worldwide PC shipments are expected to fall 9.7% in 2013, according to IDC. Today's figure represents the second time the research firm has slashed its projection, from -7.8% in May, and from an original -1.3% back in March.
- Tablets are the main transgressor, IDC noted. And China and other developing economies, which were once healthy drivers of PC sales, have seen demand dry up at even faster rates than developed markets.
- Cannibalization appears to favor the small, as IDC nudged its 2013 tablet forecast to 227.4M, from 229.3M previously. To blame? New smartphones with large screens and the release of wearable devices like smart watches.
- The ever-dimming light at the end of the tunnel bodes poorly for MSFT, INTC, DELL, HPQ, STX, WDC, MU, AMD, and NVDA.
- Previous: Global PC shipments fell 10.9% Y/Y in Q2 to 76M
Aug. 29, 2013, 2:51 PM
Jul. 25, 2013, 12:05 PMBuy the dip in Western Digital (WDC -6.2%) says FBN's Shebly Seyrafi, calling at least some of this morning's decline profit-taking, though he does worry the quarter's operating expenses came in higher than expected. Craig-Hallum's Christian Schwab downgrades to Sell, arguing there's no growth in the business. Needham's Rich Kugele reiterates his Strong Buy and $77 PT, noting outperformance on margins and earnings despite some handicaps. Seagate (STX -4.7%) slips with analysts suggesting there's been a slight share-shift to Western as Seagate avoided weak pricing in the PC market. | 3 Comments
Jul. 25, 2013, 9:15 AM
Jul. 24, 2013, 5:44 PMWestern Digital (WDC) guides on its FQ4 call for FQ1 revenue of $3.7B-$3.8B and EPS of $1.95-$2.05, largely unfavorable to a consensus of $3.77B and $2.05. Shares now -5.9% AH. Seagate (STX) -2.1% in sympathy. In its quarterly fact sheet, WDC states its total hard drive shipments fell 16% Y/Y in FQ4 to 59.9M, as 27% and 24% drops in notebook and desktop drive shipments (over 2/3 of total shipments) offset consumer electronics and branded drive growth, and roughly flat enterprise shipments. WDC and STX both fell in regular trading thanks to Seagate's numbers (I, II, III). | Comment!
Jul. 24, 2013, 4:17 PM
Jul. 24, 2013, 10:57 AMSeagate (STX -8.7%) has guided on its CC for FQ1 revenue of $3.5B-$3.6B, in-line with a $3.56 consensus. Needham is pleased, and is reiterating Buys on Seagate and Western Digital (WDC -1.9%). But as SA commenter alph124 observes, Seagate's declining cash flow in the face of slumping PC drive shipments has some investors worried. FQ4 free cash flow totaled $266M, well below net income of $447M, and operating cash flow fell to just $394M from $1.4B a year ago. Seagate has issued a new $2.5B buyback authorization, raising its available funds to $3.3B. But unless Seagate's buyback pace picks up, it'll be a while before those funds are use up. (Seagate's FQ4: I, II) | 1 Comment
Jul. 24, 2013, 9:51 AMSeagate (STX -5.4%) opens lower following its FQ4 report, and takes Western Digital (WDC -1.2%) down with it. Gross margin was 28%, +40 bps Q/Q and -560 bps Y/Y. PC drive shipments -5% Q/Q and -25% Y/Y to 34.7M. Client Non-Compute (consumer electronics, removable storage, etc.) -6% Q/Q and -3% Y/Y to 10.9M, and high-margin Enterprise Storage +9% Q/Q and -4% Y/Y to 8.2M (3.7M mission-critical drives, 4.5M near-line storage). Only $42M was spent on buybacks, down from $102M in FQ3. Average GB/drive was at 855, up from 842 in FQ3 and 692 in the year-ago period. Retail made up 11% of sales, up from 7% a year ago. (PR) (slides) (CFO comments) | 1 Comment
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Western Digital Corp is a developer, manufacturer & provider of data storage solutions that enable consumers, businesses, governments & other organizations to create, manage, experience & preserve digital content. Its product include; HDDs and SSDs.
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