Despite a Strong Earnings Surprise, Western Digital Corporation Shares Fall on Soft Next-Quarter Guidance

Image source: Western Digital.

Hard-drive maker Western Digital (NASDAQ: WDC  ) just reported results for the third quarter of fiscal 2014, complete with a separate stack of financial data and a slide deck for the conference call with analysts. In after-hours trading, shares fell 2.9% on the news.

For the third quarter, analysts were expecting adjusted earnings of $1.88 per share on $3.7 billion in total sales. The company delivered 32% year-over-year earnings growth, landing at $1.94 per share. Sales fell 3% to meet the Street estimate exactly.

Looking ahead, Western Digital set the midpoint of its fourth-quarter revenue guidance at $3.55 billion, while the earnings target centered on $1.70 per share. Both numbers fell short of the current analyst view.

Unit volumes were flat year over year, at just over 60 million. Average selling prices declined 5% to $58 per drive.

In a prepared statement, CFO Tim Leydon explained the soft guidance with seasonal revenue patterns and a $0.10 earnings impact per share from the acquisitions of Virident and sTec. The flash-memory maker and the solid-state drive pioneer added a large amount of dilutive new shares to Western Digital's earnings calculations. However, Leydon said, "we expect the sTec, VeloBit and Virident acquisitions to be accretive early in calendar year 2015."


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2938231, ~/Articles/ArticleHandler.aspx, 10/24/2014 7:28:44 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement