Western Digital (WDC) Q3 Earnings: What To Expect

Adam Hejl /
2023/05/08 4:00 am EDT

Leading data storage manufacturer Western Digital (NASDAQ: WDC) will be announcing earnings results today afternoon. Here's what to expect.

Last quarter Western Digital reported revenues of $3.11 billion, down 35.7% year on year, beating analyst revenue expectations by 4.5%. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and a decline in operating margin.

Is Western Digital buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Western Digital's revenue to decline 38.7% year on year to $2.69 billion, a further deceleration on the 5.9% year-over-year decrease in revenue the company had recorded in the same quarter last year. Adjusted loss is expected to come in at -$1.56 per share.

Western Digital Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company missed Wall St's revenue estimates twice over the last two years.

Looking at Western Digital's peers in the semiconductors segment, some of them have already reported Q3 earnings results, giving us a hint of what we can expect. Micron Technology's revenues decreased 52.6% year on year, missing analyst estimates by 0.37% and Seagate Technology reported revenue decline of 33.6% year on year, missing analyst estimates by 5.78%. Micron Technology traded flat on the results, Seagate Technology was down 4.59%. Read our full analysis of Micron Technology's results here and Seagate Technology's results here.

Technology stocks have been hit hard on fears of higher interest rates and while some of the semiconductors stocks have fared somewhat better, they have not been spared, with share price declining 6.34% over the last month. Western Digital is down 12.2% during the same time, and is heading into the earnings with analyst price target of $46, compared to share price of $33.4.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.