24/7 Wall St. » STX

24/7 Wall St. Closing Bell — May 23, 2012 (FB, PCX, BX, AMAT, DELL, AEO, BIG, HRL, STP, TSL, FRED, HNZ, MMYT, TIF, TD, COST, PETM, STX)

Paul Ausick — Wed, 23 May 2012 20:05:55 +0000

The three major US stock indexes opened lower this morning after European leaders disagree on a fiscal response to the continent’s debt crisis(our coverage here). New US home sales were slightly above the consensus estimate, but made little difference in the slide. As the day wore on, more bad news from Europe sent crude oil prices tumbling and the dollar rising in the currency markets (our coverage here). The US dollar index rose today, now up 0.76% at 82.115. The GSCI commodity index is down fractionally at 628.23, with commodities mostly lower on the stronger dollar. Orange juice, cocoa, and cotton were today’s big losers. WTI crude oil closed down -2.1% at $89.90/barrel, its lowest settlement since October, and Brent crude trades down -2.51% at $105.69/barrel. Natural gas rose just 0.52% today to $2.72/thousand cubic feet. Gold settled down -1.8% today, at $1,548.40/ounce.

The unofficial closing bells put the DJIA down nearly 7 points to 12,496.07 (-0.05%), the NASDAQ rose about 11 points (0.39%) to 2,850.12, and the S&P 500 rose 0.17% or about 2 points to 1,318.85.

There were several analyst upgrades and downgrades today, including Facebook Inc. (NASDAQ: FB) started as ‘buy’ with a target price of $40 at Needham (more coverage here); Patriot Coal Corp. (NYSE: PCX) cut to ‘hold’ at Deutsche Bank; The Blackstone Group LP (NYSE: BX) raised ‘buy’ at Sterne Agee; Applied Materials Inc. (NASDAQ: AMAT) raised to ‘neutral’ at Goldman Sachs; and Dell Inc. (NASDAQ: DELL) cut to ‘neutral’ at Mizuho and maintained as ‘underperform’ with a $14 target price at Credit Suisse.

Earnings reports since markets closed last night have led to some price changes as of the last half hour of trading today: Dell is down -16.8% at $12.55 after posting a new 52-week low of $12.31 earlier today (more coverage here); American Eagle Outfitters Inc. (NYSE: AEO) is up 1.4% at $20.07; Big Lots Inc. (NYSE: BIG) is up 4% at $36.20; Hormel Foods Corp. (NYSE: HRL) is up 1.2% at $29.54; Suntech Power Holdings Co. Ltd. (NYSE: STP) is up 1.5% at $2.01 (more coverage here); and Trina Solar Ltd. (NYSE: TSL) is up 4.9% at $5.59.

Tomorrow we are scheduled to get earnings reports from Fred’s Inc. (NASDAQ: FRED), H.J. Heinz Co. (NYSE: HNZ), MakeMyTrip Ltd. (NASDAQ: MMYT), Tiffany & Co. (NYSE: TIF), The Toronto-Dominion Bank (NYSE: TD), and Costco Wholesale Corp. (NASDAQ: COST).

Other standouts from today include the following stocks:

PetSmart Inc. (NASDAQ: PETM) is up 13.3% at $62.99 after posting a new 52-week high of $63.19 earlier today. The company reported better-than-expected earnings and forecast more good things to come.

Seagate Technology PLC (NASDAQ: STX) is down -2.4% at $25.72. The disk drive maker is buying France-based LaCie SA for $186 million.

Stay tuned for Thursday. New York Fed President William Dudley is giving a speech. We have also noted the following events on the schedule (all times Eastern):

8:30 a.m. – Durable goods orders
8:30 a.m. – New claims for unemployment benefits
10:30 a.m. – EIA weekly natural gas storage report
11:00 a.m. – Kansas City Fed manufacturing index
1:00 p.m. – 7-year note auction
4:30 p.m. – Fed balance sheet and money supply

Paul Ausick

Filed under: HI/LOW, Market Close Tagged: AEO, AMAT, BIG, BX, COST, DELL, FB, FRED, HNZ, HRL, MMYT, PCX, PETM, STP, STX, TD, TIF, TSL

Dell Plays Wrecking Ball For Entire PC Food Chain (DELL, INTC, MSFT, HPQ, STX, WDC, MU)

Administrator — Wed, 23 May 2012 15:19:19 +0000

Dell Inc. (NASDAQ: DELL) was nothing short of a really bad earnings report. The wart on the nose is a declining margin, declining earnings power, and less and less revenue growth. With only 2% to 4% expected in sequential revenue growth, now the question comes up about accurate Intel Corporation (NASDAQ: INTC) was on its reiterated guidance recently and also about how accurate all of the predictions are in the coming Windows refresh cycle for Microsoft Corporation (NASDAQ: MSFT) and the coming launch of Windows 8.

When you see a drop of 17% on Dell, you might expect that the volume was 100 million shares or so. As of 11 AM EST we have still not even seen 40 million shares trade against an average volume of 16.5 million. The volume is strong, but this feels like the sort of news that would drive 100 million shares. That being said, Dell traded 51,440,000 shares per NASDAQ trading data on its last earnings report day-after.

Hewlett-Packard Co. (NYSE: HPQ) is set to report earnings today after the close of trading and estimates are $0.91 EPS and $29.92 billion in sales. Let’s just say that it is safe to assume that the estimates have unofficially come down significantly. H-P shares are down 4.6% at $20.77 and this is a new 52-week low. As a reminder, HP is expected to announce a major round of tech layoffs today as part of its restructuring.

This appears to be the worst trading day in more than a decade for Dell on a percentage drop. Dell is down 17.1% at $12.50 now and the prior 52-week range is $13.29 to $18.36. Dell is now probably under 6-times forward earnings estimates after the drop and H-P is roughly the same. The problem is that no one is willing to pay for contracting earnings power of this sort. Dell offers no dividend to entice shareholders to stay around, and HP offers at least a yield of about 2.2% based on today’s price.

Intel Corporation (NASDAQ: INTC) is down 3.2% at $25.19 and Microsoft Corporation (NASDAQ: MSFT) is down 2.9% at $28.90.

Elsewhere in key PC components, the fallout continues… Seagate Technology PLC (NYSE: STX) is down 2% at $25.81 against a recent high of $32.55 and Western Digital Corp. (NYSE: WDC) is down 2% at $33.82 against a recent high of $44.44. We warned investors not to chase those on the last round of good news as it should have been anticipated at the end of 2011 and in the first quarter of this year. It may seem a bit of a surprise, but the US king of DRAM via Micron Technology Inc. (NASDAQ: MU) is down only 0.2% at $5.70 because it is already down so much from the highs of $10.23 over the last year.

It goes without saying… wrecking balls swing back and forth, and the damage is severe. Dell has become technology’s wrecking ball and having a ”LOW P/E VALUATION” is about as relevant as gold to a dead man today.

JON C. OGG

Filed under: Consumer Electronics, Earnings Warning, PC Companies, Software, Technology Companies Tagged: DELL, HPQ, INTC, MSFT, MU, STX, WDC

24/7 Wall St. Top Analyst Upgrades & Downgrades Of The Week

Administrator — Sat, 28 Apr 2012 11:01:49 +0000

This last week had many top analyst calls, but each week we review all of the calls looking for those which were very bold calls or that go against the grain. These make up the Top Analyst Calls of the Week.

The standout research calls this last week were in the following stocks: ABB Ltd. (NYSE: ABB); Allison Transmission Holdings, Inc. (NYSE: ALSN); Amazon.com Inc. (NASDAQ: AMZN); Apple Inc. (NASDAQ: AAPL); CafePress Inc. (NASDAQ: PRSS); Chipotle Mexican Grill, Inc. (NYSE: CMG); Demandware, Inc. (NYSE: DWRE); Hess Corporation (NYSE: HES); Infosys Ltd. (NASDAQ: INFY); McDonald’s Corporation (NYSE: MCD); SanDisk Corporation (NASDAQ: SNDK); Wal-Mart Stores Inc. (NYSE: WMT); Zynga, Inc. (NASDAQ: ZNGA); Seagate Technology PLC (NASDAQ: STX); Western Digital Corporation (NYSE: WDC); Banco Santander (NYSE: STD); and Banco Bilbao Vizcaya Argentaria, S.A. (NYSE: BBVA).

We have outlined a summary of each call and added in color on each to show why (and if) the analysts made calls worth watching.

ABB Ltd. (NYSE: ABB) is about to see a drop due to its ex-dividend date and we saw two simultaneous downgrades after an acquisition strategy was outlined this last week. On Thursday ABB shares were downgraded to Neutral at JPMorgan and they were also removed from he coveted Conviction Buy List but maintained as a ‘Buy’ over at Goldman Sachs. This one lost about 5% from earlier in the week by the time Friday’s close came around.

Allison Transmission Holdings, Inc. (NYSE: ALSN) saw its quiet period end on Tuesday. Shares recovered on Friday due to stronger numbers elsewhere but the stock had been weak after the coverage started. We saw the following initiations: Started as Outperform at Baird; Started as Neutral at Citigroup; Started as Neutral at Credit Suisse; Started as Neutral at Goldman Sachs; Started as Neutral at J.P. Morgan; and Started as Hold at KeyBanc Capital Markets.

Amazon.com Inc. (NASDAQ: AMZN) was a Johnny Come-Lately call where several analysts decided all at once that they had to upgrade the online retail giant after it blew out its earnings: Raised to Buy at BofA/ML; Raised to Buy at Goldman Sachs; Raised to Buy at Nomura; Raised to Buy at SunTrust Robinson Humphrey.

Apple Inc. (NASDAQ: AAPL) blew the door off the hinges this last week with earnings. While it was already rated and effective buy rating, the new street-high official target is $1,111 and that will make it the first company worth more than $1 trillion by market cap if it comes true. This newest street-high call came from Topeka Capital Markets’ Brian White this last Wednesday.

CafePress Inc. (NASDAQ: PRSS) saw its quiet period end this last week and these are the calls we saw for analyst initiations: Started as Buy at Janney; Started as Outperform at Raymond James; and Started as Overweight at J.P. Morgan. The initiations being positive did not help the shares.

Filed under: Analyst Calls, The Week Tagged: AAPL, ABB, ALSN, AMZN, BBVA, CMG, DWRE, HES, INFY, MCD, PRSS, SNDK, STD, STX, WDC, WMT, ZNGA

Western Digital Shares Hammered on Bad Karma (WDC, STX)

Paul Ausick — Fri, 27 Apr 2012 19:06:02 +0000

Last night computer hard drive maker Western Digital Corp. (NYSE: WDC) reported third fiscal quarter revenues and earnings that easily beat pretty low expectations. The company posted revenues of $3.04 billion, up 35% year-over-year, and EPS of $2.52. Consensus estimates called for revenue of $2.48 billion and EPS of $1.59.

Western Digital even boosted its fourth quarter estimates to $4.2-$4.4 billion in revenue and EPS of $2.35-$2.55. The consensus estimates for the fourth quarter called for revenue of $4.05 billion and EPS of $2.30. So what is Western Digital’s stock getting pounded today? And, for that matter, why is Seagate Technology LLC (NASDAQ: STX) taking its lumps today as well?

It seems that there is some concern among analysts that the hard drive industry’s recovery from the Thai floods happened more quickly than most believed it could. That means that production will rise and prices will come under pressure as the drive makers have to find a market for all those drives. That’s the straightforward interpretation. But there’s a more complicated one as well.

Western Digital believes demand will reach 155-160 million units in the fourth quarter, a figure below a Street estimate of 170 million units. Thus sales prices will be soft because demand is lower. But Western Digital’s gross margin guidance for the fourth quarter is 30%-31%, considerably stronger than usual in the drive business.

Shares in Western Digital have fallen -15% today, to $37.49, ikn a 52-week range of $22.64-$44.44. Seagate’s shares are also down -5.2% at $29.46 in a 52-week range of $9.05-$31.39.

Paul Ausick

Filed under: Consumer Electronics, Hardware, Industry, Technology, Technology Companies Tagged: STX, WDC

Top Analyst Upgrades & Downgrades (AET, AEM, APD, ALU, MDRX, AMZN, AMCC, BIDU, CBG, CTCT, DECK, EBAY, LOGI, PCS, PM, REGN, SNDK, STX, WDC, ZNGA)

Administrator — Fri, 27 Apr 2012 12:17:32 +0000

These are some of the top analyst upgrades, downgrades and initiations seen in Wall Street research calls this Friday.

Aetna Inc. (NYSE: AET) Reiterated Buy with a target price of $55 at Argus.

Agnico-Eagle Mines Limited (NYSE: AEM) Raised to Outperform at Credit Suisse.

Air Products & Chemicals Inc. (NYSE: APD) Cut to Neutral at Citigroup.

Alcatel-Lucent SA (NYSE: ALU) Maintained Underperform and cut estimates at Jefferies.

Allscripts Healthcare (NASDAQ: MDRX) Cut to Neutral at Credit Suisse; Cut to Equal-weight at Barclays.

Amazon.com Inc. (NASDAQ: AMZN) Raised to Buy at BofA/ML; Raised to Buy at Nomura; Raised to Buy at Goldman Sachs; Maintained Hold but raised target to $230 at Canaccord Genuity.

Applied Micro Circuits Corp. (NASDAQ: AMCC) Cut to Hold at Wunderlich.

Baidu, Inc. (NASDAQ: BIDU) Maintained Neutral but target cut at Credit Suisse.

CBRE Group, Inc. (NYSE: CBG) named Bull of the Day at Zacks.

Constant Contact (NASDAQ: CTCT) Cut to Neutral at Janney; Cut to Market Perform William Blair.

Deckers Outdoor Corp. (NASDAQ: DECK) Cut to Hold at Jefferies; Cut to Hold at Canaccord Genuity.

eBay Inc. (NASDAQ: EBAY) Reiterated Buy and raised target to $48 from $40 at Argus.

Logitech International (NASDAQ: LOGI) Raised to Outperform at BNP Paribas.

MetroPCS (NYSE: PCS) Cut to Hold at Argus; Cut to Hold at Deutsche Bank; Cut to Hold at Canaccord Genuity.

Philip Morris International Inc. (NYSE: PM) Reiterated Buy and raised target to $94 from $88 at Argus.

Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN) Cut to Market Perform at BMO.

SanDisk Corporation (NASDAQ: SNDK) Raised to Buy at Jefferies.

Seagate Technology PLC (NASDAQ: STX) Cut to Neutral at BofA/ML.

Western Digital Corporation (NYSE: WDC) Cut to Neutral at BofA/ML.

Zynga, Inc. (NASDAQ: ZNGA) Raised to Neutral at BofA/ML; Raised to Overweight at JPMorgan; Maintained Hold but cut target to $13 from $15 at Canaccord Genuity.

AAR Corporation (NYSE: AIR) named Bear of the Day at Zacks.

If you enjoyed the top analyst upgrades and downgrades, you can join our free email newsletter that includes analyst summaries each morning sent right to your inbox. We also cover top issues such as IPOs, special financial exclusives, mergers and more. Sign up in the box below.

JON C. OGG

Filed under: Analyst Calls Tagged: AEM, AET, ALU, AMCC, AMZN, APD, BIDU, CBG, CTCT, DECK, EBAY, LOGI, MDRX, PCS, PM, REGN, SNDK, STX, WDC, ZNGA

Is LSI Really A Screaming Buy? (LSI, STX, MRVL)

Administrator — Mon, 23 Apr 2012 12:11:47 +0000

LSI Corporation (NYSE: LSI) would probably be doing better this morning if the markets were indicated better. A report from Barron’s over the weekend called “The Little Chip Maker That Could” has the call that LSI shares could rise another 50% from the current share price. If so, then the shares could be seeing $12 or so ahead. While we would normally question an article about chasing gains endlessly, it is pretty hard to not notice that the Thomson Reuters consensus target on this issues is already $11.67.

The drive behind Barron’s high-stakes call for a 50% gain depends upon endless demand ahead for more storage and more networking capacity. LSI designs chips and software for hard drives and flash drives and the recent pop from Seagate Technology PLC (NASDAQ: STX) only adds more focus here. We would caution that most of that good news should have been anticipated in the latter part of 2011 and the start of 2012 as the shares have risen so much, but we were ahead of the catch-up game on Wall Street.

Investors should note that LSI shares are already up about 30% this year. The article cites other issues such as higher margins, above-market earnings growth ahead, a strong balance sheet, capital discipline, a streamlined operation, and other issues. While the article noted stiffer competition from Marvell Technology Group Ltd. (NASDAQ: MRVL) it also noted that Marvell was hit harder by the Thai flooding.

LSI is up 2.5% at $8.13 in early trading this Monday morning against a 52-week trading range of $4.75 to $9.20.

JON C. OGG

Filed under: Semiconductor Tagged: LSI, MRVL, STX

Why Investors Should Have At Least Some Caution Chasing Drive-Makers Now (STX, WDC, AAPL)

Administrator — Wed, 18 Apr 2012 15:43:39 +0000

Seagate Technology PLC (NASDAQ: STX) is one of today’s top market winners and shares just hit a new 52-week high. While 24/7 Wall St. has been a big backer of this drive-maker and of rival Western Digital Corporation (NYSE: WDC), investors chasing these stocks up at the current price might want to ask themselves where the hell they have been for so long.

It was Western Digital which was in the most trouble in Thailand, but it has recovered. Now we are a full quarter past the Seagate acquisition of the Samsung drive unit. Investors needed to be buying these stocks in mid-too-late 2011 when they were under pressure. We now have effectively what is two guidance hikes out of Seagate and it has performed almost the same as Apple Inc. (NASDAQ: AAPL) so far in 2012 and has nearly tripled since the lows seen last year.

Over at Western Digital, we called it a value stock in November when shares were down closer to $27 with the call that when things normalize it will be back at $35.00. These were not just value stocks at the time; they were turnaround stocks. Apparently we are just too conservative because Western Digital is now up above $41.00 after a 5% gain today.

The other driver for the drive-makers is that there is virtual duopoly now that Western Digital has closed its Hitachi HDD purchase in March and since Seagate closed its acquisition of the Samsung HDD unit back in December. Maybe the companies look less like value stocks in some of their respective stock screens now, but investors chasing these now things are finally good have really missed a large portion of this ship’s journey.

Can these continue running higher? Yes, of course they can. Seagate is currently just above $29.00 and the Thomson Reuters consensus analyst target without considering today’s news is $32.72; Western Digital is now above $$41.00 and the Thomson Reuters consensus price target is $47.20 without considering any changes from today’s news. Those price targets have ratcheted higher and higher as the companies have continued to recover. The difference we have in not wanting cheer today’s gains on endlessly in the drive-makers is that we would point out that the easy-money here has been made. Maybe the easy-money has been made and then some.

JON C. OGG

Filed under: Earnings, PC Companies, Semiconductor, Technology Companies, Turnarounds, Value Investing Tagged: AAPL, STX, WDC

Trader Alerts: Unusual Stocks on the Move (URI, ISRG, YHOO, CREE, STX)

Paul Ausick — Wed, 18 Apr 2012 12:44:08 +0000

Here’s a pre-open look at several stocks making moves this morning: United Rental Inc. (NYSE: URI), Intuitive Surgical Inc. (NASDAQ: ISRG), Yahoo! Inc. (NASDAQ: YHOO), Cree Inc. (NASDAQ: CREE), and Seagate Technology PLC (NASDAQ: STX).

United Rental Inc. (NYSE: URI) is up 10% in the pre-market to $45.00, just $0.08 shy of its 52-week high. The equipment rental company reported reported first quarter earnings after markets closed last night, and handily topped consensus estimates on EPS and revenues. Revenues totaled $656 million, well above the consensus estimate of $609 million, and adjusted EPS totaled $0.36, shattering the consensus estimate of $0.05.

Intuitive Surgical Inc. (NASDAQ: ISRG) is up about 5.5% this morning at $575.75, well above the 52-week high of $554.13. The maker of robotic surgical devices posted revenues of $495.2 million, up 28% year-over-year and substantially better than the consensus estimate of $466.7 million. EPS totaled $3.50 compared with the consensus estimate of $3.09.

Yahoo! Inc. (NASDAQ: YHOO) is up about 2.7% this morning at $15.42. The internet portal posted revenues last night of $1.08 billion, up just 1% over the same period a year ago and slightly better than the consensus estimate of $1.06 billion. EPS came in at $0.23, also better than the consensus estimate of $0.17.

Cree Inc. (NASDAQ: CREE) is down about -3.5% in the pre-market at $30.20. The LED lighting maker missed the consensus revenue estimate of $301 million, posting revenue for its third fiscal quarter of $285 million. The company also missed the consensus EPS estimate of $0.21 by a penny.

Seagate Technology PLC (NASDAQ: STX) is up about 3.2% in the pre-market at $28.78, within a quarter of a new 52-week high. The disk drive maker posted revenue of $4.45 billion compared with a consensus estimate of $4.37 billion and adjusted EPS of $2.64 compared with an estimate of $2.10.

Paul Ausick

Filed under: Earnings, Pre-Market Activity, Trading Alert Tagged: CREE, ISRG, STX, URI, YHOO

24/7 Wall St. Closing Bell (AAPL, FSLR, VLO, TIF, C, CMA, GS, JNJ, MMR, GWW, YHOO, SYK, STX, URI, SRSL, ENOC, LEE)

Paul Ausick — Tue, 17 Apr 2012 20:07:31 +0000

Markets opened higher this morning and by late-morning equities were trading down about 1.5% across the board, where they have mostly remained for the rest of the day. An upbeat auction on short-term Spanish bonds and several positive earnings reports this morning led the market higher. China reported a sharp decline in foreign direct investment, but the impact on European and US markets was negligible. The US dollar index fell today, now down -0.11% at 79.467. The GSCI commodity index is down about -0.03% at 675.59, with most commodities gaining on the falling dollar. WTI crude oil closed up 1.2% at $104.20/barrel, and Brent crude trades down -0.06% at $118.61/barrel. Gold settled up 0.01% today, at $1,651.10/ounce.

The unofficial closing bells put the DJIA up more than 194 points to 13,115.54 (1.50%), the NASDAQ rose more than 54 points (1.82%) to 3,042.82, and the S&P 500 rose 1.55% or more than 21 points to 1,390.78.

There were several analyst upgrades and downgrades today, including Apple Inc. (NASDAQ: AAPL) started as a ‘strong buy’ with a target price of $800 at Raymond James; First Solar Inc. (NASDAQ: FSLR) cut to ‘hold’ at Goldman Sachs; Valero Energy Corp. (NYSE: VLO) reiterated as ‘outperform’ with a target price of $37 at Credit Suisse; Tiffany & Co. (NYSE: TIF) started as ‘neutral’ at Macquarie; and Citigroup Inc. (NYSE: C) reiterated as ‘outperform’ with a target price of $48 at Credit Suisse.

Earnings reports since markets closed last night have led to some price changes as of the last half hour of trading today: Comerica Inc. (NYSE: CMA) is up 3.6% at $31.98; Goldman Sachs Group Inc. (NYSE: GS) is down about -1% at $116.59; Johnson & Johnson (NYSE: JNJ) is up 0.30% at $64.17; McMoRan Exploration Inc. (NYSE: MMR) is up 4% at $9.07; and W.W. Grainger Inc. (NYSE: GWW) is up 0.01% at $215.80;

After markets close today, we’ll hear from Yahoo! Inc. (NASDAQ: YHOO), Stryker Corp. (NYSE: SYK), Seagate Technology PLC (NASDAQ: STX), and United Rentals Inc. (NYSE: URI).

Other standouts from today include the following stocks:

SRS Labs Inc. (NASDAQ: SRSL) is up almost 37% at 9.38. The audio and voice technology company is being acquired by DTS for about $134 million.

EnerNOC Inc. (NASDAQ: ENOC) is up nearly 17% at $7.61. The smart metering company has a contract to provide natural gas metering services for 4,000 non-residential buildings in Brooklyn and Queens, New York.

Lee Enterprises Inc. (NYSE: LEE) is down -12% at $1.15. The newspaper publisher posted a wider loss in its second fiscal quarter.

Stay tuned for Wednesday. We have noted the following events on the schedule (all times Eastern):

7:00 a.m. – Mortgage Bankers’ Association purchase applications
10.30 a.m. – EIA weekly petroleum status report

Paul Ausick

Filed under: HI/LOW, Market Close Tagged: AAPL, C, CMA, ENOC, FSLR, GS, GWW, JNJ, LEE, MMR, SRSL, STX, SYK, TIF, URI, VLO, YHOO

Disk Drive Industry to Grow Again in 2012 (STX, WDC)

Paul Ausick — Mon, 02 Apr 2012 17:12:35 +0000

The devastating and tragic flooding in Thailand put a severe crimp in the ability of disk drive makers like Seagate Technology PLC (NASDAQ: STX) and Western Digital Corp. (NYSE: WDC) to meet demand in 2011. But the country, and the industry, should recover nicely in 2012, according to the latest data from International Data Corp. (IDC).

The IDC report notes that the shortfall in shipments allowed the disk drive makers to reset their pricing, raising their profits at the same time that the higher prices contributed to a slow-down longer-term price erosion. From the report:

A reset of the HDD industry structure should allow for the remaining HDD industry participants to slowly reduce HDD prices from current levels at a rate that still delivers value to customers, while at the same time ensuring sufficient funding is available to develop new HDD technologies that are needed to improve HDD capacity, performance, reliability, power consumption, and security.

One interesting observation in IDC’s report is that the disk drive market will revert to the model of its early days, when large enterprises will once again be the major consumer of disk drives and the largest contributors to disk drive revenues. The PC and consumer electronics markets will continue to have a solid demand, but declining prices for disk drives in these sectors will hurt disk makers revenues.

The IDC press release is available here.

Filed under: Consumer Electronics, Hardware, Industry, Research, Technology Tagged: STX, WDC