The 10-second takeaway
For the quarter ended March 30 (Q3), Western Digital crushed expectations on revenues and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded significantly and GAAP earnings per share increased significantly.
Margins expanded across the board.
Western Digital tallied revenue of $3.04 billion. The 16 analysts polled by S&P Capital IQ anticipated revenue of $2.42 billion on the same basis. GAAP reported sales were 35% higher than the prior-year quarter's $2.25 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 $2.52. The 19 earnings estimates compiled by S&P Capital IQ predicted $1.55 per share. GAAP EPS of $1.96 for Q3 were 216% higher than the prior-year quarter's $0.62 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 32.2%, 1,400 basis points better than the prior-year quarter. Operating margin was 18.4%, 1,090 basis points better than the prior-year quarter. Net margin was 15.9%, 940 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $4.41 billion. On the bottom line, the average EPS estimate is $2.48.
Next year's average estimate for revenue is $11.70 billion. The average EPS estimate is $6.90.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 1,272 members out of 1,348 rating the stock outperform, and 76 members rating it underperform. Among 328 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 314 give Western Digital a green thumbs-up, and 14 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 $45.83.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool owns shares of Western Digital. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.