UPDATE 3-Western Digital results top Street forecast
* Q1 EPS $1.25 vs Street view 94 cts
* Q1 rev $2.21 bln vs Street view $2.06 bln
* Hard drive shipments up 12 pct to 44.1 mln units
* Sees Q2 EPS $1.26-1.36, rev $2.25-$2.35 bln
* Shares up less than 1 pct
(Adds forecast, CEO and analyst comments, byline)
SAN FRANCISCO, Oct 22 (Reuters) - Hard disk drive maker Western Digital Corp (WDC.N) posted much better-than-expected results on strong consumer demand for its drives and set a forecast for the current quarter above Wall Street targets.
Shares rose less than 1 percent on the report following a 3.5 percent climb during the regular session.
Disk drive makers and the personal computer industry as a whole are starting to recover from a steep falloff in spending on PCs that accompanied the recession.
Western Digital, the No. 2 disk drive maker, said on Thursday it saw "unexpectedly robust" demand in the quarter, strength that has continued into the current quarter.
The company forecast earnings for the current quarter of $1.26 to $1.36 a share on revenue of $2.25 billion to $2.35 billion. That compares the average analyst estimate for earnings of $1.09 a share on revenue of $2.19 billion.
"We continue to be very encouraged by the demonstration through the last six months in terms of the recovery of demand once an inventory adjustment had been made," Chief Executive John Coyne said on a conference call with analysts.
He said strong demand appears to be coming from consumers buying PCs and external storage as part of the growing "social media phenomenon."
Western Digital said hard drive inventories remain "extremely lean," as the industry remains disciplined in managing supply and demand."
"The ASP (average selling price) and gross margin were definitely better than most people were expecting, that was a real positive," said Hapoalim Securities USA analyst Kevin Hunt.
Gross margin was 23.3 percent, up from 20.1 percent last year, and better than the 19.9 percent analyst forecast. Average hard drive selling price was roughly $49 per unit, up $1 from the previous quarter.
The company said net profit in the fiscal first quarter ended Oct. 2 rose to $288 million, or $1.25 a share, from $211 million, or 93 cents a share, in the year-ago period.
The result topped the average Wall Street estimate of 94 cents a share, according to Thomson Reuters I/B/E/S.
Revenue rose 5 percent to $2.21 billion, versus the $2.06 billion Wall Street estimate. Hard drive shipments rose 12 percent to 44.1 million units.
Analysts are expecting corporations to begin updating four- and five-year-old PCs in a wave of upgrades starting some time next year, which should help boost sales for component suppliers such as Western Digital.
Earlier in the week, Seagate Technology (STX.O), the No. 1 hard disk drive maker and Western Digital's chief rival, posted results and an outlook that exceeded expectations.
Western Digital shares have more than tripled this year.
Shares of Lake Forest, California-based Western Digital closed at $37.11 on the New York Stock Exchange and rose 2.7 percent to $38.10 in extended trading. (Reporting by Gabriel Madway; Editing by Phil Berlowitz and Gunna Dickson)
