Western Digital’s stock jumps on strong earnings results
Western Digital Corp. today posted second-quarter financial results that beat expectations, with revenue from hard drive sales hitting a three-year high, it said today.
The company reported a profit before certain costs such as stock compensation of 69 cents per share on revenue of $3.9 billion, down 7% from the same period a year ago. That was ahead of Wall Street’s targets of a 54-cent profit and $3.88 billion in revenue.
Investors responded warmly, with Western Digital’s stock gaining almost 10% in after-hours trading.
The company, which makes hard drives and data storage products used in personal computers and servers, said it was boosted by huge retail demand for desktop and notebook computers during the quarter.
“The team delivered solid results this quarter, especially as we continue adapting our business and technology portfolio to take advantage of the immense opportunities in the storage industry,” Western Digital Chief Executive David Goeckeler (pictured) said in his remarks. “During the quarter, we captured strength in the retail business and also delivered on our target outcome to complete qualification of our energy-assisted hard drives and second-generation enterprise SSD products with some of the world’s largest data center operators.”
Breaking down its revenue by business segment, Western Digital said its client device unit was the biggest earner with sales topping $2.1 billion. Client solutions pulled in $1 billion, while data center devices and solutions added $807 million.
Constellation Research Inc. analyst Holger Mueller said Western Digital has done well by beating expectations in the quarter.
“The key area of concern for investors will be the data center revenue, which has plummeted year-over-year,” Mueller said. “The next few quarters will show if Western Digital has reached the bottom and can start to turn things around.”
The company said it generated $425 million in cash from operations during the quarter.
For the third quarter, Western Digital said, it’s expecting revenue of between $3.58 billion and $4.05 billion, versus Wall Street’s forecast of $3.88 billion.
Photo: Western Digital
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