Western Digital Corp Slides On Poor Outlook, Fusion-IO Falls On Q3 Lower Margin (NYSE:WDC, FIO)

Western Digital Corp Slides On Poor Outlook, Fusion-IO Falls On Q3 Lower Margin (NYSE:WDC, FIO)

Western Digital Corp. (NYSE:WDC) shares are tanking in the pre-market session despite the company reported a well above profit for the third quarter. However, its share sold off due to the company’s commentary on the supply/demand balance in the drive industry, which has seen sharply higher prices in recent months in the wake of last year’s severe flooding in Thailand.

The company reported $483 million or $1.96 per share, up from a year ago profit of $146 million or 62 cents per share. On an adjusted basis, the company would have earned $2.52 a share, huge beat of 93 cents from analysts’ estimates of $1.59.

During the quarter, Western Digital shipped 44.2 million drives in the quarter, well above the 31-33 million it had guided earlier. In the second quarter the company shipped 25 million hard disk drives.

Revenue increased to $3.04 billion from $2.25 billion last year. Analysts were looking for $2.46 billion in sales for the period.

For the current quarter, the company projected to earn $2.35 and $2.55 and revenue to be in the range of $4.2 and $4.4 billion, compared to analysts’ estimates of $2.34 per share on revenue of $4.18 billion.

Shares of WDC are down 11% to $39.25 in pre-market trading.

Fusion-IO, Inc. (NYSE:FIO) shares slid 1.35% in the pre-market session as the company’s witnessed a lower gross margin in the third quarter, while beating analysts’ estimate in terms of profit and revenue.

The company reported net loss of $4.7 million, or 5 cents a share, reversing a year ago profit of $7 million, or 9 cents a share. On an adjusted basis, the company would have earned 6 cents, above analysts’ estimates of 2 cents.

Quarterly revenue grew 40% to $94.2 million, ahead of the $85.6 million Wall Street expected.

Gross margins trimmed to 52.1% from 53.2% as operating costs almost doubled to $54 million.