Western Digital Shares Slide on Lower Forecast

by Christopher Freeburn | October 23, 2012 11:09 am

Western Digital Shares Slide on Lower Forecast

Western Digital (NASDAQ:WDC[1]) announced quarterly results that topped Wall Street estimates, but warned of a weaker-than-expected current quarter[2], sending it shares tumbling.

The company said it earned $519 million during its fiscal first quarter, more than twice the $239 million it earned in the same period last year. Adjusted EPS came in at $2.36, topping the $2.29 that Wall Street had forecast, Reuters noted. Revenue jumped 50% from last year to $4.04 billion.

The company projected a current-quarter profit of between $1.65 and $1.85 a share on revenue ranging from $3.55 billion to $3.7 billion. That estimate disappointed analysts, who had expected earnings of $2.40 a share and revenue of $4.08 billion for the second quarter.

Investors were unhappy with the guidance, sending Western Digital shares down more than 3% in Tuesday morning trading.

First-quarter revenue and earnings were boosted by the March acquistion of Hitachi‘s (PINK:HTHIY[3]) data storage business.

Company officials indicated that a sluggish worldwide economy had crimped demand for computer storage products.

Western Digital wasn’t the only tech company expecting a soft current quarter. Computer chipmaker Texas Instruments (NASDAQ:TXN[4]) reported lower third-quarter revenue that beat estimates, but predicted lower-than-expected fourth-quarter sales[5] due to a sluggish economy.

Endnotes:
  1. WDC: http://studio-5.financialcontent.com/investplace/quote?Symbol=WDC
  2. warned of a weaker-than-expected current quarter: http://www.reuters.com/article/2012/10/22/us-westerndigital-results-idUSBRE89L1DV20121022
  3. HTHIY: http://studio-5.financialcontent.com/investplace/quote?Symbol=HTHIY
  4. TXN: http://studio-5.financialcontent.com/investplace/quote?Symbol=TXN
  5. predicted lower-than-expected fourth-quarter sales: http://www.reuters.com/article/2012/10/22/us-westerndigital-results-idUSBRE89L1DV20121022

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