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.
Is Western Digital the best tech stock for you? You may be missing something obvious. Check out the semiconductor company that Motley Fool analysts expect to lead "The Next Trillion-dollar Revolution." Click here for instant access to this free report.
- Add Western Digital to My Watchlist.
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.