Now, STX's preannouncement last week has helped, but I expect WDC will also post and guide March higher.
However, some believe investors are overlooking several concerns about WDC:
1. Poential STX share gains due to new products including Samsung's leading M8 mobile drives 2. The OEM supply agreements STX has signed 3. Will China impose restrictions on the HGST deal, there are labor problems at the HGST plants in China. 4. Impact of HGST deal, flood, and arbitration ruling on WDC balance sheet. 5. Will the arbitration ruling limit WDC's ability to develop next gen heads?
I think that you and the Street are over-estimating a bit WD's ability to recover so quickly from the sftermath of the flood, not that I discount that they are doing the best job that they can as the best management team in the industry and with all the extra support that the OEMs and customer base can muster given their desire to make sure that STX knows they have competition.
As I've noted elsewhere, I'm pretty sure that the arbitration award is only money and has no impact on future head development short of any steps they may voluntarily implement internally to make sure that it doesn't happen again.
As for exceeding and guiding higher, I don't know how you can even decide what that is given that, as far as I can see, they will almost certainly report GAAP numbers that are massively below Yahoo average estimates for both the December and March quarters.
Would you measure their performance just based on units shipped and gross margin to determine if they are "exceeding and guiding higher"? If so, then maybe they can do that, but that's a little bit like someone being swept away in a tsunami saying that's he's better off because he has three logs floating nearby instead of two. The key question will be, as Watkins was fond of saying, what will they be wearing when the flood waters recede (although, in his homily, it was when the tide goes out but, hey, close enough)?