The 10-second takeaway
For the quarter ended Dec. 30 (Q2), Western Digital beat expectations on revenues and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue contracted significantly, and earnings per share dropped significantly.
Gross margins grew, operating margins grew, net margins dropped.
Western Digital chalked up revenue of $2 billion. The 16 analysts polled by S&P Capital IQ looked for a top line of $1.8 billion. Sales were 19% lower than the prior-year quarter's $2.5 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.
Non-GAAP EPS came in at $1.51. The 16 earnings estimates compiled by S&P Capital IQ predicted $0.72 per share on the same basis. GAAP EPS of $0.61 for Q2 were 36% lower than the prior-year quarter's $0.96 per share.
Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.
For the quarter, gross margin was 32.5%, 1,330 basis points better than the prior-year quarter. Operating margin was 18.1%, 840 basis points better than the prior-year quarter. Net margin was 7.3%, 180 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $2.1 billion. On the bottom line, the average EPS estimate is $0.97.
Next year's average estimate for revenue is $9.3 billion. The average EPS estimate is $4.12.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 1,282 members out of 1,358 rating the stock outperform, and 76 members rating it underperform. Among 346 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 335 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 outperform, with an average price target of $39.94.
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