Set-top box specialists Pace on October 20th issued a Profits Warning, its third in the past 18 months, because the Thailand floods had hit the supply of hard drives for its PVRs. Pace is likely not to be alone.
Western Digital, the manufacturer hardest hit by the monsoon floods, supplies about one third of the world’s 166 million hard drives shipped in Q3, and says production will likely be hit for “several quarters”.
Toshiba also has plants in Thailand responsible for about 50 per cent of its capacity.
Timothy Leyden, Western Digital’s COO told analysts on an earnings call that he could not say when Western’s Thai factories would resume production.
Western Digital’s share price fell back 5 per cent, but almost immediately bounced back 6 per cent when industry tracking company iSupply suggested that supplies would start flowing in Q4.
Ian Robertson, an analyst at Seymour Pierce, said: “This is not something Pace could have foreseen, nor something it could really have found many ways to work around.” He added: “The sales are not being lost to competitors as everyone is in the same boat.”
Pace’s shares fell back more than 12 per cent on the news, to 80p, a 52-week ‘low’, although recovered slightly in early trading on October 21st. Pace’s statement October 20th said it was reviewing its position and would update investors on November 17th, along with the results of a strategic review conducted by new chairman Allan Leighton..