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Will HDD Offerings Aid Western Digital's (WDC) Q3 Earnings?

Western Digital WDC is scheduled to report fiscal third-quarter 2024 results on Apr 25.

For the to-be-reported quarter, management projects non-GAAP earnings per share in the range of a loss of 10 cents to earnings of 20 cents. The Zacks Consensus Estimate is pegged at an earnings of 21 cents. WDC reported a loss per share of $1.37 in the prior-year quarter.

Western Digital expects non-GAAP revenues in the range of $3.2-$3.4 billion. The consensus estimate is currently pegged at $3.33 billion, indicating an increase of 18.7% from the prior-year quarter’s figure.

The company surpassed the Zacks Consensus Estimate in all the last four quarters. It has a trailing four-quarter earnings surprise of 14.5%, on average.

Western Digital Corporation Price and EPS Surprise

Western Digital Corporation Price and EPS Surprise
Western Digital Corporation Price and EPS Surprise

Western Digital Corporation price-eps-surprise | Western Digital Corporation Quote

Factors to Note

Western Digital’s fiscal third-quarter performance is likely to have benefited from solid momentum in HDD. Also, the company expects flash revenues to be up slightly as it is focused on optimizing bit shipments and ASP.

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The company has been able to manage business cycles in flash by proactively managing inventories and maximizing capital efficiency through its joint venture with Kioxia.

The Zacks Consensus Estimate for fiscal third-quarter HDD revenues is pegged at $1.609 billion. The Zacks Consensus Estimate for Flash revenues is pegged at $1.771 billion for the fiscal third quarter.

In the last reported quarter, the company shipped approximately 1 million UltraSMR drives. In the fiscal third quarter, the company expects UltraSMR hard drive shipments and SMR drive shipments to increase significantly.

Management expects the proliferation of generative AI-driven storage deployments to result in a client and consumer device refresh cycle and boost content growth in smartphones, gaming, PCs and consumers in the long run. Also, the company’s performance is likely to have benefited from the strong demand for WD Black gaming SSD product.

However, Western Digital’s fiscal third-quarter performance is likely to have been affected by soft cloud demand due to prevailing global macroeconomic uncertainties and reduced eSSD bit shipments. Gross margins are likely to be negatively impacted due to underutilization charges.

What the Zacks Model Unveils

Our proven model predicts 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. This is exactly the case here.

Western Digital has an Earnings ESP of +124.30% and presently carries a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Other Stocks to Consider

Here are a few stocks that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat in the to-be-reported quarter.

IMAX Corporation IMAX has an Earnings ESP of +60.72% and currently carries a Zacks Rank #3. IMAX is scheduled to report quarterly earnings on Apr 25. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for IMAX’s to-be-reported quarter’s earnings and revenues is pegged at 9 cents per share and $76.8 million, respectively. Shares of IMAX have lost 15.3% in the past year.

Meta Platforms META has an Earnings ESP of +0.62% and presently carries a Zacks Rank #2. META is slated to release quarterly numbers on Apr 24.

The Zacks Consensus Estimate for META’s to-be-reported quarter’s earnings and revenues is pegged at $4.32 per share and $36.25 billion, respectively. Shares of META have gained 126.3% in the past year.

United Microelectronics Corporation UMC has an Earnings ESP of +11.11% and a Zacks Rank #3. UMC is set to report quarterly figures on Apr 24.

The Zacks Consensus Estimate for UMC’s to-be-reported quarter’s earnings and revenues is pegged at 14 cents per share and $1.72 billion, respectively. Shares of UMC have lost 2.2% in the past year.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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Western Digital Corporation (WDC) : Free Stock Analysis Report

United Microelectronics Corporation (UMC) : Free Stock Analysis Report

IMAX Corporation (IMAX) : Free Stock Analysis Report

Meta Platforms, Inc. (META) : Free Stock Analysis Report

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