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What's in Store for Western Digital's (WDC) Q1 Earnings?
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Western Digital Corp. (WDC - Free Report) is scheduled to release fiscal first-quarter 2018 results on Oct 26. Notably, the company has a decent record of earnings surprises with an average positive surprise of 9.55% in the trailing four quarters. Last quarter, the company came up with a positive surprise of 3.53%.
In fiscal fourth-quarter 2017, the company reported non GAAP earnings of $2.93 per share compared with $1.03 reported in the year-ago quarter. Revenues increased 38.5% year over year to $4.84 billion and surpassed the Zacks Consensus Estimate of $4.80 billion. Both the top and bottom line figures were better than the guided range.
Let’s take a look at the factors that are expected to influence the first-quarter 2018 earnings.
Key Growth Drivers
We believe Western Digital will benefit from positive synergies derived from the SanDisk acquisition. The latter’s product portfolio is aiding the company’s expansion in the solid state drive (SSD) market. This is also anticipated to provide Western Digital with a competitive advantage against peers like Seagate Technology (STX - Free Report) .
Further, the continuous enhancement of the company’s product suite is a positive. The development of the industry’s first 3D NAND technology with 96 layers of storage capability in June was significant. The company’s growing footprint in the automotive as well as the connected home and industrial categories is a major tailwind.
Western Digital Corporation Price and EPS Surprise
Notably, the company completed the acquisition of Upthere, an app-based cloud-storage startup during the quarter. The company also entered into a definitive agreement to buy Tegile Systems, a provider of flash-driven storage arrays for database. We believe these acquisitions will help the company in expanding its presence with a wider range of products and solutions.
However, the ongoing legal tussle with Toshiba regarding the memory unit in Japan remains a concern. Nevertheless, strong demand for NAND flash memory chips is anticipated to be a key catalyst.
Guidance & Estimates
For fiscal first-quarter 2018, revenues are expected to be approximately $5.10 billion, which is slightly lower than the Zacks Consensus Estimate of $5.12 billion.
Management expects non-GAAP earnings to be in the range of $3.25–$3.35 per share. The Zacks Consensus Estimate of $3.30 per share is in line with the mid-point of the guided range.
Per the Zacks Consensus Estimate, non-computable unit shipments are anticipated to amount to $16.7 million, while the computable unit shipments are projected to total $19 million.
Zacks Rank and Key Picks
Western Digital currently has a Zacks Rank #3 (Hold).
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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What's in Store for Western Digital's (WDC) Q1 Earnings?
Western Digital Corp. (WDC - Free Report) is scheduled to release fiscal first-quarter 2018 results on Oct 26. Notably, the company has a decent record of earnings surprises with an average positive surprise of 9.55% in the trailing four quarters. Last quarter, the company came up with a positive surprise of 3.53%.
In fiscal fourth-quarter 2017, the company reported non GAAP earnings of $2.93 per share compared with $1.03 reported in the year-ago quarter. Revenues increased 38.5% year over year to $4.84 billion and surpassed the Zacks Consensus Estimate of $4.80 billion. Both the top and bottom line figures were better than the guided range.
Let’s take a look at the factors that are expected to influence the first-quarter 2018 earnings.
Key Growth Drivers
We believe Western Digital will benefit from positive synergies derived from the SanDisk acquisition. The latter’s product portfolio is aiding the company’s expansion in the solid state drive (SSD) market. This is also anticipated to provide Western Digital with a competitive advantage against peers like Seagate Technology (STX - Free Report) .
Further, the continuous enhancement of the company’s product suite is a positive. The development of the industry’s first 3D NAND technology with 96 layers of storage capability in June was significant. The company’s growing footprint in the automotive as well as the connected home and industrial categories is a major tailwind.
Western Digital Corporation Price and EPS Surprise
Western Digital Corporation Price and EPS Surprise | Western Digital Corporation Quote
Notably, the company completed the acquisition of Upthere, an app-based cloud-storage startup during the quarter. The company also entered into a definitive agreement to buy Tegile Systems, a provider of flash-driven storage arrays for database. We believe these acquisitions will help the company in expanding its presence with a wider range of products and solutions.
However, the ongoing legal tussle with Toshiba regarding the memory unit in Japan remains a concern. Nevertheless, strong demand for NAND flash memory chips is anticipated to be a key catalyst.
Guidance & Estimates
For fiscal first-quarter 2018, revenues are expected to be approximately $5.10 billion, which is slightly lower than the Zacks Consensus Estimate of $5.12 billion.
Management expects non-GAAP earnings to be in the range of $3.25–$3.35 per share. The Zacks Consensus Estimate of $3.30 per share is in line with the mid-point of the guided range.
Per the Zacks Consensus Estimate, non-computable unit shipments are anticipated to amount to $16.7 million, while the computable unit shipments are projected to total $19 million.
Zacks Rank and Key Picks
Western Digital currently has a Zacks Rank #3 (Hold).
Better-ranked stocks in the broader technology sector include Applied Materials, Inc. (AMAT - Free Report) and NVIDIA Corporation (NVDA - Free Report) , both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>