The 10-second takeaway
For the quarter ended March 29 (Q3), Western Digital beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew significantly. Non-GAAP earnings per share contracted significantly. GAAP earnings per share shrank significantly.
Margins contracted across the board.
Western Digital reported revenue of $3.76 billion. The 21 analysts polled by S&P Capital IQ foresaw revenue of $3.61 billion on the same basis. GAAP reported sales were 24% higher than the prior-year quarter's $3.04 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 $2.10. The 24 earnings estimates compiled by S&P Capital IQ predicted $1.77 per share. Non-GAAP EPS of $2.10 for Q3 were 17% lower than the prior-year quarter's $2.52 per share. GAAP EPS of $1.60 for Q3 were 18% lower than the prior-year quarter's $1.96 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 28.2%, 400 basis points worse than the prior-year quarter. Operating margin was 11.1%, 830 basis points worse than the prior-year quarter. Net margin was 10.4%, 550 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $3.59 billion. On the bottom line, the average EPS estimate is $1.74.
Next year's average estimate for revenue is $15.10 billion. The average EPS estimate is $8.06.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 1,319 members out of 1,393 rating the stock outperform, and 74 members rating it underperform. Among 294 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 282 give Western Digital a green thumbs-up, and 12 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 $49.20.
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