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TWST: Please give us an overview of your coverage in the storage space.
Mr. Miller: I cover the disk drive area of storage. This includes companies like
Seagate (STX), Western Digital (WDC), Hutchinson Technology (HTCH), Komag
(KOMG), and Intevac (IVAC), which makes equipment for sputtering disks. I have
recently added Imation (IMN), which provides tape, flash memory and optical
storage products TWST: How have the companies done so far this year from a business perspective?
Mr. Miller: In general, the drive companies are all making money; some companies
registered a very strong June quarter. It may surprise you, but the combined
earnings per share of the drive firms Seagate, Maxtor and Western Digital is
very similar to the combined earnings per share of Dell (DELL), Apple (AAPL),
and Gateway (GTW) over the last five years. In terms of the disk drive industry,
they are still digesting the merger of Seagate with Maxtor. There are a lot of
one-time costs - about $500 million - related to the merger. Since February, the
concern has been a re-emergence of aggressive pricing in the industry, and this
pricing has disturbed some investors. This is not the first time it has
happened. I think it is more attributed to just the share gain redistribution
among the principal players from the Maxtor merger with Seagate.
Tickers included in this excerpt: HIT, HTCH, IMN, IVAC, KOMG, STX, WDC
For more information call (212) 952 7433. The
Wall Street Transcript does not endorse any of the comments made by interviewees, and does
not make stock recommendations.
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