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.
Factors to Note Ahead of Western Digital (WDC) Q3 Earnings
Read MoreHide Full Article
Western Digital (WDC - Free Report) is scheduled to report third-quarter fiscal 2022 results on Apr 28.
On Mar 2, 2022, Western Digital revealed that production operations at its Yokkaichi and Kitakami JV flash fabrication facilities had been restored to normal levels in late February. However, the company’s flash availability will be trimmed by approximately 7 exabytes, occurring primarily in its third and fourth fiscal quarters as the facilities struggle to spring back to full production level, added the company. Owing to this development, Western Digital slashed its third-quarter fiscal 2022 guidance.
In early February, Western Digital noted that production operations at both Yokkaichi and Kitakami JV and flash fabrication facilities had been hampered due to the usage of contaminated materials.
For the to-be-reported quarter, the company projects non-GAAP earnings in the range of $1.30-$1.60, lower than the previous forecast of $1.50-$1.80. The consensus mark for earnings is pegged at $1.49 per share, suggesting an increase of 46.1% from the year-ago quarter’s levels.
Western Digital expects non-GAAP revenues between $4.20 billion and $4.40 billion, lower than the previous guidance of $4.45-$4.65 billion. The Zacks Consensus Estimate for revenues is currently pegged at $4.36 billion, indicating an increase of 5.5% from the prior-year quarter’s reported figure.
The company surpassed the Zacks Consensus Estimate in the last four quarters. It has a trailing four-quarter earnings surprise of 27.4%, on average. In the past year, shares of the company have lost 30.7% of their value against the industry’s decline of 12.3%.
Western Digital Corporation Price and EPS Surprise
Western Digital’s fiscal third-quarter performance is likely to be driven by the company’s robust product portfolio, especially flash and hard drive solutions, amid investments in digital transformation by business enterprises. Strong cloud data center demand and recovery in enterprise markets are expected to have acted as tailwinds.
The company’s WD Black product line is expected to have incremental adoption as gamers move toward more customized gaming solutions. Steady traction seen for the SanDisk brand of retail products is expected to have positively impacted the top line.
Higher adoption of Western Digital’s energy-assisted drives (18 and 20 terabytes) and the company’s second-generation NVMe enterprise SSDs by cloud providers and big enterprise OEMs are expected to have favored the top line in the to-be-reported quarter.
Coming to the product group, the Zacks Consensus Estimate for Flash revenues is pegged at $2.334 billion. The projection suggests an increase of 7.3% from the prior-year quarter’s levels.
Flash revenues are likely to gain from higher demand for second-generation NVMe enterprise SSDs and the ramp-up of new 5G phones incorporating the company’s latest BiCS5 flash solutions.
The Zacks Consensus Estimate for fiscal third-quarter hard disk drive (or “HDD”) revenues is pegged at $1.97 billion, indicating an increase of 0.4% on a year-over-year basis. HDD revenues are expected to have benefitted mainly from higher product demand from cloud end-market.
Declining trends witnessed in PC shipments in the first quarter of the calendar year 2022 are likely to have dented the company’s performance in the quarter under review. Going by the Gartner report, traditional PC shipments were down 6.8% on a year-over-year basis to 77.9 million in the quarter in first-quarter 2022.
Continued pandemic-induced supply chain troubles, component shortages and logistics bottlenecks witnessed globally are likely to have affected the company’s performance in the quarter to be reported.
Higher costs associated with the ramping up of next-generation energy-assisted hard drives and increasing COVID-19 related expenses amid stiff competition in the disk drive market might have dented fiscal third-quarter profits.
What the Zacks Model Unveils
Our proven model doesn’t conclusively predict an earnings beat for Western Digital this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
Western Digital has an Earnings ESP of -1.90% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are some stocks you may consider as our proven model shows that these have the right mix of elements to beat estimates this time.
The Zacks Consensus Estimate for Sirius XM’s to-be-reported quarter’s earnings and revenues is pegged at 8 cents per share and $2.13 billion, respectively. Sirius XM surpassed earnings estimates in the last four quarters, delivering an average surprise of 22%. Shares of SIRI have lost 1.8% in the past year.
Booking Holdings (BKNG - Free Report) has an Earnings ESP of +4.52% and currently carries a Zacks Rank of 3. Booking Holdings is set to announce quarterly figures on May 4.
The Zacks Consensus Estimate for Booking Holdings’ to-be-reported quarter’s earnings and revenues is pegged at a loss of 98 cents per share and $2.51 billion, respectively. Booking Holdings surpassed earnings estimates in the preceding four quarters, delivering an average surprise of 19.1%. Shares of BKNG have lost 10% in the past year.
Sony Corporation (SONY - Free Report) has an Earnings ESP of +12.96% and currently carries a Zacks Rank #3. Sony is slated to release quarterly numbers on May 10.
The Zacks Consensus Estimate for Sony’s to-be-reported quarter’s earnings and revenues is pegged at $0.82 per share and $20.82 billion, respectively. Shares of SONY have lost 21.5% in the past year.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Factors to Note Ahead of Western Digital (WDC) Q3 Earnings
Western Digital (WDC - Free Report) is scheduled to report third-quarter fiscal 2022 results on Apr 28.
On Mar 2, 2022, Western Digital revealed that production operations at its Yokkaichi and Kitakami JV flash fabrication facilities had been restored to normal levels in late February. However, the company’s flash availability will be trimmed by approximately 7 exabytes, occurring primarily in its third and fourth fiscal quarters as the facilities struggle to spring back to full production level, added the company. Owing to this development, Western Digital slashed its third-quarter fiscal 2022 guidance.
In early February, Western Digital noted that production operations at both Yokkaichi and Kitakami JV and flash fabrication facilities had been hampered due to the usage of contaminated materials.
For the to-be-reported quarter, the company projects non-GAAP earnings in the range of $1.30-$1.60, lower than the previous forecast of $1.50-$1.80. The consensus mark for earnings is pegged at $1.49 per share, suggesting an increase of 46.1% from the year-ago quarter’s levels.
Western Digital expects non-GAAP revenues between $4.20 billion and $4.40 billion, lower than the previous guidance of $4.45-$4.65 billion. The Zacks Consensus Estimate for revenues is currently pegged at $4.36 billion, indicating an increase of 5.5% from the prior-year quarter’s reported figure.
The company surpassed the Zacks Consensus Estimate in the last four quarters. It has a trailing four-quarter earnings surprise of 27.4%, on average. In the past year, shares of the company have lost 30.7% of their value against the industry’s decline of 12.3%.
Western Digital Corporation Price and EPS Surprise
Western Digital Corporation price-eps-surprise | Western Digital Corporation Quote
Other Factors to Note Ahead of Q3 Release
Western Digital’s fiscal third-quarter performance is likely to be driven by the company’s robust product portfolio, especially flash and hard drive solutions, amid investments in digital transformation by business enterprises. Strong cloud data center demand and recovery in enterprise markets are expected to have acted as tailwinds.
The company’s WD Black product line is expected to have incremental adoption as gamers move toward more customized gaming solutions. Steady traction seen for the SanDisk brand of retail products is expected to have positively impacted the top line.
Higher adoption of Western Digital’s energy-assisted drives (18 and 20 terabytes) and the company’s second-generation NVMe enterprise SSDs by cloud providers and big enterprise OEMs are expected to have favored the top line in the to-be-reported quarter.
Coming to the product group, the Zacks Consensus Estimate for Flash revenues is pegged at $2.334 billion. The projection suggests an increase of 7.3% from the prior-year quarter’s levels.
Flash revenues are likely to gain from higher demand for second-generation NVMe enterprise SSDs and the ramp-up of new 5G phones incorporating the company’s latest BiCS5 flash solutions.
The Zacks Consensus Estimate for fiscal third-quarter hard disk drive (or “HDD”) revenues is pegged at $1.97 billion, indicating an increase of 0.4% on a year-over-year basis. HDD revenues are expected to have benefitted mainly from higher product demand from cloud end-market.
Declining trends witnessed in PC shipments in the first quarter of the calendar year 2022 are likely to have dented the company’s performance in the quarter under review. Going by the Gartner report, traditional PC shipments were down 6.8% on a year-over-year basis to 77.9 million in the quarter in first-quarter 2022.
Continued pandemic-induced supply chain troubles, component shortages and logistics bottlenecks witnessed globally are likely to have affected the company’s performance in the quarter to be reported.
Higher costs associated with the ramping up of next-generation energy-assisted hard drives and increasing COVID-19 related expenses amid stiff competition in the disk drive market might have dented fiscal third-quarter profits.
What the Zacks Model Unveils
Our proven model doesn’t conclusively predict an earnings beat for Western Digital this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
Western Digital has an Earnings ESP of -1.90% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are some stocks you may consider as our proven model shows that these have the right mix of elements to beat estimates this time.
Sirius XM (SIRI - Free Report) has an Earnings ESP of +3.23% and currently has a Zacks Rank #3. Sirius XM is scheduled to report earnings results on Apr 28. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Sirius XM’s to-be-reported quarter’s earnings and revenues is pegged at 8 cents per share and $2.13 billion, respectively. Sirius XM surpassed earnings estimates in the last four quarters, delivering an average surprise of 22%. Shares of SIRI have lost 1.8% in the past year.
Booking Holdings (BKNG - Free Report) has an Earnings ESP of +4.52% and currently carries a Zacks Rank of 3. Booking Holdings is set to announce quarterly figures on May 4.
The Zacks Consensus Estimate for Booking Holdings’ to-be-reported quarter’s earnings and revenues is pegged at a loss of 98 cents per share and $2.51 billion, respectively. Booking Holdings surpassed earnings estimates in the preceding four quarters, delivering an average surprise of 19.1%. Shares of BKNG have lost 10% in the past year.
Sony Corporation (SONY - Free Report) has an Earnings ESP of +12.96% and currently carries a Zacks Rank #3. Sony is slated to release quarterly numbers on May 10.
The Zacks Consensus Estimate for Sony’s to-be-reported quarter’s earnings and revenues is pegged at $0.82 per share and $20.82 billion, respectively. Shares of SONY have lost 21.5% in the past year.