Revenues of $2.8 billion
On April 29, 2016, Western Digital (WDC) announced its fiscal 3Q16 results. It reported revenues of $2.8 billion and net income of $74 million, with earnings per share (or EPS) of $0.32. In fiscal 3Q15, WDC reported revenues of $3.5 billion and net income of $384 million with EPS of $1.63. This indicates a 20% fall in revenues and a massive 81% drop in net income.
Western Digital had initially expected revenues of $2.8 billion–$2.9 billion, with EPS of $1.20–$1.30 for fiscal 3Q16. Analysts expected the firm to post revenues of ~$2.9 billion, with EPS of $1.29. WDC’s shares fell by 11.4% the day it released its earnings.
“We continue to manage our business effectively in a dynamic storage demand environment,” noted Steve Milligan, WDC’s chief executive officer. “Computer usage continues to shift from PCs to mobile devices and enterprise workloads are moving increasingly to cloud-based architectures. Our strategy to become a broad-based provider of media-agnostic storage solutions anticipates these and other trends.”
Milligan also stated that Western Digital should be better positioned to address and capitalize on the above-mentioned changes and opportunities after the firm completes its acquisition of SanDisk (SNDK). Western Digital expects to complete the SanDisk acquisition by the end of June 2016.
About Western Digital
Western Digital (WDC) is a leading manufacturer of storage solutions that enables customers to create, manage, and preserve digital content. It has a market cap of ~$8.9 billion. Its competitors include Seagate (STX), SanDisk (SNDK), and NetApp (NTAP), which have market caps of ~$5.8 billion, ~$15.2 billion, and ~$6.5 billion, respectively.
These companies account for 1.2% of the Technology Select Sector SPDR ETF (XLK).