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Western Digital (WDC) Q4 Earnings Beat on Higher Revenues
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Western Digital Corporation (WDC - Free Report) reported fourth-quarter fiscal 2024 non-GAAP earnings of $1.44 per share, surpassing the Zacks Consensus Estimate by 14.3%. The company reported a loss of $1.99 per share in the prior-year quarter.
For fiscal 2024, WDC reported a net loss of 20 cents per share, down 94% year over year.
The company's diverse and innovative portfolio aligns well with its strategic roadmap, and the structural change implementations have strengthened operational efficiency, highlighted WDC.
Revenues of $3.76 billion missed the Zacks Consensus Estimate by 0.18%. However, the top line soared 41% year over year owing to robust performance across Cloud end markets. On a sequential basis, revenues increased 9%.
For fiscal 2024, revenues rose 6% year over year to $13 billion.
Following the earnings announcement, shares of WDC declined 6.32% in the pre-market trading on Jul 31. In the past year, shares have gained 58.1% compared with the sub-industry’s growth of 68.7%.
Image Source: Zacks Investment Research
Quarter in Detail
Revenues from the Cloud end market (50% of total revenues) climbed 89% year over year to $1,882 million, driven by rising shipments and price per unit for nearline HDDs, combined with higher enterprise SSD bit shipments. The cloud segment saw sequential growth of 21% attributed to higher nearline HDD shipments and improved pricing, as well as increased bit shipments and pricing for enterprise SSDs.
Revenues from the Client end market (32%) were up 16% year over year to $1,204 million, backed by increasing flash average selling prices (ASPs). Revenues in the client segment grew 3% sequentially due to an uptick in flash ASPs, which offset a decline in flash bit shipments. HDD revenue witnessed a marginal decrease.
Revenues from the Consumer end market (18%) were up 5% year over year to $678 million, driven by heightened flash ASPs and bit shipments. Sequentially, the consumer segment experienced a 7% decrease in revenues due to reduced flash and HDD bit shipments, partially mitigated by higher ASPs in both flash and HDD categories.
Considering revenues by product group, Flash revenues (46.8% of total revenues) rose 28% from the year-ago quarter figure to $1.761 billion. Sequentially, flash revenues grew 3%.
Hard disk drive (HDD) revenues (53.2% of total revenues) surged 55% year over year to $2 billion. Revenues were up 14% quarter over quarter.
Western Digital Corporation Price, Consensus and EPS Surprise
Non-GAAP gross margin was 36.3% compared with 3.9% in the year-ago quarter. The improvement was driven by better pricing and cost discipline, along with an increase in volume.
HDD’s gross margin expanded 15.4% year over year to 36.1%. Flash gross margin came in at 36.5% compared with (11.9%) in the prior-year quarter.
Non-GAAP operating expenses increased 20% year over year to $700 million. Non-GAAP operating income totaled $666 million against a non-GAAP operating loss of $478 million in the prior-year quarter.
Balance Sheet & Cash Flow
As of Jun 28, 2024, cash and cash equivalents were $1.8 billion compared with $2 billion reported as of Jun 30, 2023.
The long-term debt (including the current portion) was $5.684 billion as of Jun 30, 2024.
Western Digital generated $366 million in cash from operations against $68 million of cash utilized in the prior-year quarter.
Free cash flow amounted to $282 million in the quarter under review against the free cash outflow of $219 million reported in the prior-year quarter.
Fiscal Q1 Guidance
For first-quarter fiscal 2025, the company expects non-GAAP revenues in the range of $4-$4.2 billion. The Zacks Consensus Estimate is currently pegged at $4.16 billion.
Management projects non-GAAP earnings in the range of $1.55 to $1.85 per share. The Zacks Consensus Estimate is currently pegged at $1.82 per share.
WDC expects non-GAAP gross margin in the range of 37-39%. Non-GAAP operating expenses are expected to be between $695 million and $715 million.
BlackBerry’s (BB - Free Report) reported first-quarter fiscal 2025 adjusted loss per share of 3 cents was narrower than the company’s estimate of a loss of 4-6 cents. In the year-ago quarter, it reported non-GAAP earnings of 6 cents per share. The Zacks Consensus Estimate was pegged at a loss of 4 cents per share.
Shares of BB have lost 48.9% in the past year.
Badger Meter, Inc (BMI - Free Report) reported earnings per share (EPS) of $1.12 for second-quarter 2024, beating the Zacks Consensus Estimate by 14.3%. Also, the bottom line compared favorably with the year-ago quarter’s EPS of 76 cents.
Shares of BMI have gained 26% in the past year.
SAP SE (SAP - Free Report) reported second-quarter 2024 non-IFRS earnings of €1.10 ($1.18) per share, climbing 59% from the year-ago quarter’s levels. The Zacks Consensus Estimate was pegged at $1.01.
In the past year, shares of SAP have gained 58.9%.
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Western Digital (WDC) Q4 Earnings Beat on Higher Revenues
Western Digital Corporation (WDC - Free Report) reported fourth-quarter fiscal 2024 non-GAAP earnings of $1.44 per share, surpassing the Zacks Consensus Estimate by 14.3%. The company reported a loss of $1.99 per share in the prior-year quarter.
For fiscal 2024, WDC reported a net loss of 20 cents per share, down 94% year over year.
The company's diverse and innovative portfolio aligns well with its strategic roadmap, and the structural change implementations have strengthened operational efficiency, highlighted WDC.
Revenues of $3.76 billion missed the Zacks Consensus Estimate by 0.18%. However, the top line soared 41% year over year owing to robust performance across Cloud end markets. On a sequential basis, revenues increased 9%.
For fiscal 2024, revenues rose 6% year over year to $13 billion.
Following the earnings announcement, shares of WDC declined 6.32% in the pre-market trading on Jul 31. In the past year, shares have gained 58.1% compared with the sub-industry’s growth of 68.7%.
Image Source: Zacks Investment Research
Quarter in Detail
Revenues from the Cloud end market (50% of total revenues) climbed 89% year over year to $1,882 million, driven by rising shipments and price per unit for nearline HDDs, combined with higher enterprise SSD bit shipments. The cloud segment saw sequential growth of 21% attributed to higher nearline HDD shipments and improved pricing, as well as increased bit shipments and pricing for enterprise SSDs.
Revenues from the Client end market (32%) were up 16% year over year to $1,204 million, backed by increasing flash average selling prices (ASPs). Revenues in the client segment grew 3% sequentially due to an uptick in flash ASPs, which offset a decline in flash bit shipments. HDD revenue witnessed a marginal decrease.
Revenues from the Consumer end market (18%) were up 5% year over year to $678 million, driven by heightened flash ASPs and bit shipments. Sequentially, the consumer segment experienced a 7% decrease in revenues due to reduced flash and HDD bit shipments, partially mitigated by higher ASPs in both flash and HDD categories.
Considering revenues by product group, Flash revenues (46.8% of total revenues) rose 28% from the year-ago quarter figure to $1.761 billion. Sequentially, flash revenues grew 3%.
Hard disk drive (HDD) revenues (53.2% of total revenues) surged 55% year over year to $2 billion. Revenues were up 14% quarter over quarter.
Western Digital Corporation Price, Consensus and EPS Surprise
Western Digital Corporation price-consensus-eps-surprise-chart | Western Digital Corporation Quote
Margins
Non-GAAP gross margin was 36.3% compared with 3.9% in the year-ago quarter. The improvement was driven by better pricing and cost discipline, along with an increase in volume.
HDD’s gross margin expanded 15.4% year over year to 36.1%. Flash gross margin came in at 36.5% compared with (11.9%) in the prior-year quarter.
Non-GAAP operating expenses increased 20% year over year to $700 million. Non-GAAP operating income totaled $666 million against a non-GAAP operating loss of $478 million in the prior-year quarter.
Balance Sheet & Cash Flow
As of Jun 28, 2024, cash and cash equivalents were $1.8 billion compared with $2 billion reported as of Jun 30, 2023.
The long-term debt (including the current portion) was $5.684 billion as of Jun 30, 2024.
Western Digital generated $366 million in cash from operations against $68 million of cash utilized in the prior-year quarter.
Free cash flow amounted to $282 million in the quarter under review against the free cash outflow of $219 million reported in the prior-year quarter.
Fiscal Q1 Guidance
For first-quarter fiscal 2025, the company expects non-GAAP revenues in the range of $4-$4.2 billion. The Zacks Consensus Estimate is currently pegged at $4.16 billion.
Management projects non-GAAP earnings in the range of $1.55 to $1.85 per share. The Zacks Consensus Estimate is currently pegged at $1.82 per share.
WDC expects non-GAAP gross margin in the range of 37-39%. Non-GAAP operating expenses are expected to be between $695 million and $715 million.
Zacks Rank
Currently, Western Digital sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Performance of Other Companies
BlackBerry’s (BB - Free Report) reported first-quarter fiscal 2025 adjusted loss per share of 3 cents was narrower than the company’s estimate of a loss of 4-6 cents. In the year-ago quarter, it reported non-GAAP earnings of 6 cents per share. The Zacks Consensus Estimate was pegged at a loss of 4 cents per share.
Shares of BB have lost 48.9% in the past year.
Badger Meter, Inc (BMI - Free Report) reported earnings per share (EPS) of $1.12 for second-quarter 2024, beating the Zacks Consensus Estimate by 14.3%. Also, the bottom line compared favorably with the year-ago quarter’s EPS of 76 cents.
Shares of BMI have gained 26% in the past year.
SAP SE (SAP - Free Report) reported second-quarter 2024 non-IFRS earnings of €1.10 ($1.18) per share, climbing 59% from the year-ago quarter’s levels. The Zacks Consensus Estimate was pegged at $1.01.
In the past year, shares of SAP have gained 58.9%.