We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Western Digital (WDC) Q3 Earnings Beat, Revenues Fall Y/Y
Read MoreHide Full Article
Western Digital Corporation (WDC - Free Report) reported third-quarter fiscal 2023 non-GAAP loss of $1.37 per share, narrower than the Zacks Consensus Estimate of a loss of $1.55. The company had reported earnings of $1.65 in the prior-year quarter.
The performance was affected by challenging macro environment and underutilization charges which weighed on the margins.
Revenues of $2.803 billion beat the Zacks Consensus Estimate by 1.4%. However, the top line decreased 36% year over year owing to weak performance across all segments. On a sequential basis, revenues declined 10%.
Western Digital Corporation Price, Consensus and EPS Surprise
In the past year, shares of Western Digital have lost 40.4% of their value compared with the sub-industry’s decline of 14.7%.
Image Source: Zacks Investment Research
Quarter in Detail
Beginning first-quarter fiscal 2022, Western Digital started reporting revenues under three refined end markets — Cloud (includes products for public or private cloud), Client (includes products sold directly to OEMs or through distribution) and Consumer (includes retail and other end-user products).
Revenues from the Cloud end market (43% of total revenues) fell 32% year over year to $1.205 billion owing to lower flash pricing, and lower shipments of both hard drive and flash products. On a sequential basis, cloud revenues were down 2%.
Revenues from the Client end market (35% of total revenues) were down 44% year over year to $975 billion. The downtick was caused by lower flash pricing on a year-over-year basis, coupled with reduced client SSD and hard drive shipments for PC applications. Client revenues declined 10% sequentially.
Revenues from the Consumer end market (22% of total revenues) were down 29% year over year to $623 million. Revenues decreased 22% on a sequential basis. Sequential performance was hurt by seasonal decline in demand for both retail hard drives and flash products.
Considering revenues by product group, Flash revenues (46.6% of total revenues) declined 42% from the year-ago quarter’s figure to $1.307 billion. Sequentially, flash revenues fell 21%.
HDD revenues (53.4% of total revenues) decreased 30% year over year to $1.496 billion. Revenues were up 3% quarter over quarter.
Key Metrics
The company shipped 12.6 million HDDs at an average selling price (ASP) of $109. The reported shipments declined 36.4% from the prior-year quarter’s levels.
On a quarter-over-quarter basis, HDD Exabytes sales were up 15%. Flash exabytes sales were down 14%. Total exabytes sales (excluding non-memory products) were up 9% sequentially.
ASP/Gigabytes (excluding licensing, royalties, and non-memory products) were down 10% sequentially.
Margins
Non-GAAP gross margin was 10.6% compared with 31.7% reported in the year-ago quarter. The gross margin performance was mainly impacted by $275 million of charges incurred for manufacturing underutilization and inventory write downs among other expenses.
HDD gross margin contracted 340 bps year over year to 24.3%. Flash gross margin was a negative 5% against 36% reported in the prior-year quarter.
Non-GAAP operating expenses moved down 19% from the year-ago quarter’s level to $602 million.
Non-GAAP operating loss totaled $304 million against the non-GAAP operating income of $650 million in the prior-year quarter.
Balance Sheet & Cash Flow
As of Mar 31, cash and cash equivalents were $2.22 billion compared with $1.871 billion reported as of Dec 30, 2022.
The long-term debt (including current portion) was $7.073 billion as of Mar 31.
Western Digital used $381 million in cash from operations against $398 million of cash generated from operations in the previous-year quarter.
Free cash outflow amounted to $527 million against the free cash flow $148 million reported in the prior-year quarter.
Q4 Guidance
For fourth-quarter fiscal 2023, the company expects non-GAAP revenues in the range of $2.4-$2.6 billion. The Zacks Consensus Estimate is currently pegged at $2.9 billion.
Management projects non-GAAP loss per share to be between $1.90 and $2.20. The Zacks Consensus Estimate is currently pegged at a loss of $1.31.
WDC expects non-GAAP gross margin in the range of 3-5%. Non-GAAP operating expenses are expected to be between $580 million and $600 million.
Zacks Rank & Stocks to Consider
Currently, Western Digital carries a Zacks Rank #3 (Hold).
The Zacks Consensus Estimate for Badger Meter’s 2023 earnings has increased 4.7% in the past 60 days to $2.69 per share. BMI’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 5.3%. Shares of BMI have surged 77.5% in the past year.
The Zacks Consensus Estimate for ANSYS’ 2023 earnings has been unchanged in the past 30 days to $8.56 per share. The long-term earnings growth rate is expected to be 7.6%.
ANSS earnings beat the Zacks Consensus Estimate in the last four quarters, the average surprise being 11.6%. Shares of ANSS have gained 17.4% in the past year.
The Zacks Consensus Estimate for Blackbaud’s 2023 earnings is pegged at $3.53 per share, up 2.9% in the past 60 days. The long-term earnings growth rate is anticipated to be 10.4%.
Blackbaud’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 10.4%. Shares of BLKB have increased 42.4% in the past year.
Zacks' 7 Best Strong Buy Stocks (New Research Report)
Valued at $99, click below to receive our just-released report predicting the 7 stocks that will soar highest in the coming month.
Image: Bigstock
Western Digital (WDC) Q3 Earnings Beat, Revenues Fall Y/Y
Western Digital Corporation (WDC - Free Report) reported third-quarter fiscal 2023 non-GAAP loss of $1.37 per share, narrower than the Zacks Consensus Estimate of a loss of $1.55. The company had reported earnings of $1.65 in the prior-year quarter.
The performance was affected by challenging macro environment and underutilization charges which weighed on the margins.
Revenues of $2.803 billion beat the Zacks Consensus Estimate by 1.4%. However, the top line decreased 36% year over year owing to weak performance across all segments. On a sequential basis, revenues declined 10%.
Western Digital Corporation Price, Consensus and EPS Surprise
Western Digital Corporation price-consensus-eps-surprise-chart | Western Digital Corporation Quote
In the past year, shares of Western Digital have lost 40.4% of their value compared with the sub-industry’s decline of 14.7%.
Image Source: Zacks Investment Research
Quarter in Detail
Beginning first-quarter fiscal 2022, Western Digital started reporting revenues under three refined end markets — Cloud (includes products for public or private cloud), Client (includes products sold directly to OEMs or through distribution) and Consumer (includes retail and other end-user products).
Revenues from the Cloud end market (43% of total revenues) fell 32% year over year to $1.205 billion owing to lower flash pricing, and lower shipments of both hard drive and flash products. On a sequential basis, cloud revenues were down 2%.
Revenues from the Client end market (35% of total revenues) were down 44% year over year to $975 billion. The downtick was caused by lower flash pricing on a year-over-year basis, coupled with reduced client SSD and hard drive shipments for PC applications. Client revenues declined 10% sequentially.
Revenues from the Consumer end market (22% of total revenues) were down 29% year over year to $623 million. Revenues decreased 22% on a sequential basis. Sequential performance was hurt by seasonal decline in demand for both retail hard drives and flash products.
Considering revenues by product group, Flash revenues (46.6% of total revenues) declined 42% from the year-ago quarter’s figure to $1.307 billion. Sequentially, flash revenues fell 21%.
HDD revenues (53.4% of total revenues) decreased 30% year over year to $1.496 billion. Revenues were up 3% quarter over quarter.
Key Metrics
The company shipped 12.6 million HDDs at an average selling price (ASP) of $109. The reported shipments declined 36.4% from the prior-year quarter’s levels.
On a quarter-over-quarter basis, HDD Exabytes sales were up 15%. Flash exabytes sales were down 14%. Total exabytes sales (excluding non-memory products) were up 9% sequentially.
ASP/Gigabytes (excluding licensing, royalties, and non-memory products) were down 10% sequentially.
Margins
Non-GAAP gross margin was 10.6% compared with 31.7% reported in the year-ago quarter. The gross margin performance was mainly impacted by $275 million of charges incurred for manufacturing underutilization and inventory write downs among other expenses.
HDD gross margin contracted 340 bps year over year to 24.3%. Flash gross margin was a negative 5% against 36% reported in the prior-year quarter.
Non-GAAP operating expenses moved down 19% from the year-ago quarter’s level to $602 million.
Non-GAAP operating loss totaled $304 million against the non-GAAP operating income of $650 million in the prior-year quarter.
Balance Sheet & Cash Flow
As of Mar 31, cash and cash equivalents were $2.22 billion compared with $1.871 billion reported as of Dec 30, 2022.
The long-term debt (including current portion) was $7.073 billion as of Mar 31.
Western Digital used $381 million in cash from operations against $398 million of cash generated from operations in the previous-year quarter.
Free cash outflow amounted to $527 million against the free cash flow $148 million reported in the prior-year quarter.
Q4 Guidance
For fourth-quarter fiscal 2023, the company expects non-GAAP revenues in the range of $2.4-$2.6 billion. The Zacks Consensus Estimate is currently pegged at $2.9 billion.
Management projects non-GAAP loss per share to be between $1.90 and $2.20. The Zacks Consensus Estimate is currently pegged at a loss of $1.31.
WDC expects non-GAAP gross margin in the range of 3-5%. Non-GAAP operating expenses are expected to be between $580 million and $600 million.
Zacks Rank & Stocks to Consider
Currently, Western Digital carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology space are Badger Meter (BMI - Free Report) , ANSYS (ANSS - Free Report) and Blackbaud (BLKB - Free Report) . BMI currently sports a Zacks Rank #1 (Strong Buy) whereas ANSYS and Blackbaud carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Badger Meter’s 2023 earnings has increased 4.7% in the past 60 days to $2.69 per share. BMI’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 5.3%. Shares of BMI have surged 77.5% in the past year.
The Zacks Consensus Estimate for ANSYS’ 2023 earnings has been unchanged in the past 30 days to $8.56 per share. The long-term earnings growth rate is expected to be 7.6%.
ANSS earnings beat the Zacks Consensus Estimate in the last four quarters, the average surprise being 11.6%. Shares of ANSS have gained 17.4% in the past year.
The Zacks Consensus Estimate for Blackbaud’s 2023 earnings is pegged at $3.53 per share, up 2.9% in the past 60 days. The long-term earnings growth rate is anticipated to be 10.4%.
Blackbaud’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 10.4%. Shares of BLKB have increased 42.4% in the past year.