Flood-hit WD could lose HDD leadership

WD has announced very good results for its first financial 2012 quarter, ending September 30, with revenue of $2.7bn (£1.7bn), 12 per cent or so up on the year ago quarter's $2.4bn. Net profit was $239m (£151m), satisfyingly higher than the $197m recorded a year ago, and 58 million disk drives were shipped – that's seven million more than a year ago.

The shipped drive figure is up 14.1 per cent year-on-year and 7.5 per cent sequentially. Stifel Nicolaus analyst Aaron Rakers calculates WD's shipment share as 32.8 percent and Seagate's as 31.4 per cent. WD shipped 19.622 million notebook drives (+18.7 per cent year-on-year; +16.3 per cent sequentially), 21.588 million desktop drives (+3.2 per cent year-on-year; -3 per cent sequentially), and a mere 2.369 million enterprise drives (+2.2 per cent year-on-year; -3.8 per cent sequentially).

In the consumer electronics drives area, WD shipped 7.188 million drives (+32.7 per cent y-o-y, +11.3 per cent seq - good growth), and branded retail/external drive shipments were 7.06m (+24.3 per cent y-o-y, 24.5 per cent sequentially - solid growth). Both desktop and enterprise drive sales declined compared to the previous quarter but other drive shipments rose so much that overall drive shipments were up sequentially.

Rakers thinks Seagate shipped approximately 3.675 million branded drives, growing 18.5 per cent year-on-year and 5 per cent sequentially. WD is doing better.

WD has sailed past Seagate in unit ship terms and everything is looking rosy, or was until it started raining in Thailand ... and raining and raining.

Some 60 per cent of WD's drives are made in Thailand and it has suspended production there due to flooding. Two of its Thai facilities are flooded although much production and test equipment has been moved from ground-level to the first floors to prevent damage.

Read more here.

One danger here is that flood problems could set WD back substantially and allow Seagate to regain its previous leadership position. ®