Revenues and operating expenses
In fiscal 4Q16, Western Digital (WDC) expects revenues in the range of $2.6 billion–$2.7 billion. The firm expects its gross margin percentage to improve compared to fiscal 3Q16. It also expects operating expenses of $475 million in 4Q16.
Excluding the impact due to the interest expense from debt financing related to the SanDisk acquisition, we estimate non-GAAP (generally accepted accounting principles) earnings per share (or EPS) between $1.00–$1.10.
Western Digital (WDC) expects to achieve total savings of $800 million on an annualized run-rate basis by the end of 2017 compared to the earlier estimated savings of $650 million. Savings from operating expenses is expected to be $450 million. Savings of approximately $300 million should occur by the end of 2016, and the balance of $150 million is expected by the end of 2017.
For the cost of goods sold, WDC expects to achieve savings of $350 million on an annualized run-rate basis, of which 50% should occur by the end of 2016 and the balance by the end of 2017, compared to the firm’s earlier estimate of $250 million.