Western Digital sees revenue below estimates

SAN JOSE: Data-storage device maker Western Digital Corp on Thursday forecast current-quarter revenue below analysts’ estimates, and said it would not agree to Toshiba Corp’s terms to participate in a new chip production unit.

The company’s shares fell 2.1 per cent at US$87.50 (RM371) in after-hours trading. They have surged 31.5 per cent this year.

Western Digital has sought an injunction against Toshiba’s sale of its chip unit to a group led by Bain Capital LP that includes the United States company’s rivals Seagate and SK Hynix Inc.

Toshiba said earlier this month it was discussing joint investment in a new chip production line, Fab 6, with Western Digital as it looked to repair the relationship.

However, Western Digital said on Thursday it would not agree to Toshiba’s terms of waiving consent rights that would help it block the deal as a condition to participate in the joint investment.

“At this time, we are not confident that an agreement would be reached on this next investment tranche either,” said chief executive Stephen Milligan on a post-earnings call.

The wrangling has worried investors over Western Digital’s ability to access crucial NAND chips supply.

“Based on the joint venture agreements, we remain confident in our planned supply bid growth rate of 35 to 45 per cent for calendar 2018 and calendar 2019, irrespective of these initial investments in Fab 6,” said Milligan.

Western Digital said it expected second-quarter revenue of US$5.2 billion to US$5.3 billion and adjusted earnings of US$3.60 to US$3.70 per share. Reuters