Shares of computer disk drive maker Western Digital Corp. fell Wednesday along with the stocks of other disk driver manufacturers after an analyst predicted new price wars in the industry.
Western Digital's stock fell $1.50 a share to $13.125 on the New York Stock Exchange. The prices of Conner Peripherals Inc., Seagate Technology Corp., Quantum Corp. and others also fell after analyst John Rossi of investment bank Robertson Stephens & Co. in San Francisco predicted price cuts of 5% to 8% a quarter in the coming months. He believes an oversupply of drives may result, because many companies are expanding their factories.
But Robert Blair, spokesman for Irvine-based Western Digital, said the company believes its earnings will not suffer dramatically from price cuts over the next two quarters. He said the company is comfortable with analysts' projections of earnings per share of 63 cents to 73 cents for its fourth quarter ending June 30.
"We still see very good demand," Blair said.
Rossi's report downgraded ratings of Quantum and Conner but did not review Western Digital. In response to Rossi's report, analyst Paul Weinstein at investment bank Kidder, Peabody & Co. in New York, issued a report contradicting Rossi. He said he expects good sales growth for the coming quarters.