The 10-second takeaway
For the quarter ended Dec. 28 (Q2), Western Digital beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue increased significantly and GAAP earnings per share grew significantly.
Gross margins shrank, operating margins shrank, net margins increased.
Western Digital booked revenue of $3.82 billion. The 18 analysts polled by S&P Capital IQ expected revenue of $3.65 billion on the same basis. GAAP reported sales were 92% higher than the prior-year quarter's $2.00 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $2.09. The 22 earnings estimates compiled by S&P Capital IQ predicted $1.81 per share. GAAP EPS of $1.36 for Q2 were 123% higher than the prior-year quarter's $0.61 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 27.7%, 480 basis points worse than the prior-year quarter. Operating margin was 12.5%, 610 basis points worse than the prior-year quarter. Net margin was 8.8%, 150 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $3.56 billion. On the bottom line, the average EPS estimate is $1.74.
Next year's average estimate for revenue is $14.79 billion. The average EPS estimate is $7.70.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 1,314 members out of 1,388 rating the stock outperform, and 74 members rating it underperform. Among 327 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 316 give Western Digital a green thumbs-up, and 11 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Western Digital is hold, with an average price target of $42.02.
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