Western Digital CorporationNYSE
Western Digital, Misunderstood Merger With Significant Upside And Limited Downside
Alex Zhao, CFA • 40 Comments
Alex Zhao, CFA • 40 Comments
Fri, Nov. 11, 4:12 PM
- Analyst Katy Huberty notes 37% of Apple's (NASDAQ:AAPL) market capitalization, or $216B, is held overseas and should a prospective 10% repatriation allowance occur, the company could save $54B in tax expense if it chooses to bring that sum back onshore.
- Should the theorized scenario play out, shareholder returns, debt reduction, substantial M&A and a combination of all of the above are cited to be on the table. Further notes, "It would likely also remove an overhang on the stock that has been in place for many years."
- Additionally identifies other potential beneficiaries on the hypothesis including NetApp (NASDAQ:NTAP), with 43% of its market capitalization offshore, Hewlett Packard Enterprise (NYSE:HPE), at 26%, HP (NYSE:HPQ), at 21%, Western Digital (NYSE:WDC), at 17%, and IBM (NYSE:IBM), at 6%. Does, however, also consider levels of international revenue exposure and the impact other forthcoming policies could have on these names, graphing out some related percentages in a model displayed here.
Fri, Nov. 4, 5:40 AM
Wed, Oct. 26, 5:38 PM
- Results – revenue $4.71B (+40.2% Y/Y, $190M above estimates), EPS $1.18 ($0.13 above estimates), operating income $632M (vs. $405M Y/Y, net income $341M (vs. $366M Y/Y)
- Operating expenses – $1.103B vs. $633M Y/Y, $1.001B Q/Q
- CEO Steve Milligan highlights strong hard drive and flash-based product demand across all customer categories, PC trends above expectations and continued progress in transition to 3D NAND.
- The quarter marks the first of full integration with SanDisk subsequent merger closure in May.
- Western Digital (NYSE:WDC) closed today higher by 5.4% and is up an additional 3.7% in extended trading on the release.
- Financial statements
- Conference call (outlook forthcoming)
- Press release
Wed, Oct. 26, 4:17 PM
Tue, Oct. 25, 5:35 PM
- ABX, ACGL, AEM, AHL, ALDW, ALGT, AMSF, ANIK, AR, ARI, ARRS, AXS, AXTI, BGG, BWLD, CAA, CACI, CAKE, CDE, CHE, CMO, CMPR, CRY, CSGP, CSII, CW, DDR, DLB, DRE, ECHO, EFX, EGHT, EPE, EQY, ESND, ESV, EXR, FBHS, FFIV, FISV, FORR, GG, GRPN, GTY, HUBG, IBKC, INFN, JBT, KEX, KMT, KNX, KRA, KRC, KWR, LLNW, LMAT, MB, MC, MEOH, MKSI, MMLP, MMSI, MN, MUR, NEM, NEU, NOW, NTGR, NTRI, NXPI, O, OCN, ORLY, PLNT, PLXS, PPC, PRXL, PSA, PTC, QDEL, QEP, QTM, RCII, RGA, RHI, RJF, SCI, SFLY, SGMO, SHLM, SIGI, SU, TER, TILE, TIS, TRN, TSLA, TTMI, TXN, TYL, UCTT, UHS, UNM, VAR, VMW, WCN, WDC, WIRE, WLL, XL
Tue, Oct. 11, 8:25 AM
- The company expects FQ1 revenue of $2.8B and GAAP and non-GAAP gross margin of about 28% - this versus previous guidance of at least $2.7B and 27%, and Street estimates for $2.74B.
- Expense measures continue to progress and operating expenses are expected to be $580M vs. $470M the previous quarter - mostly thanks to higher performance-based compensation. The company ended the quarter with about $1.5B of cash and cash equivalents on hand.
- STX +1.65% premarket; WDC +0.4%
Wed, Sep. 7, 3:00 PM
Wed, Sep. 7, 9:17 AM
Wed, Sep. 7, 7:28 AM| Wed, Sep. 7, 7:28 AM | 13 Comments
Thu, Aug. 25, 12:45 PM
- HP reported Q3 results yesterday and on its earnings call, CEO Dion Weisler noted "some shortages, particularly around LCDs, DRAM and Flash memory."
- Susquehanna analyst Mehdi Hosseini notes potential resulting favorability for Micron Technology (MU +6%), Western Digital (WDC +3%) and Corning (GLW +0.4%). The firm upgraded Micron to a Positive rating and $18 price target ($16.45 current price) in late June.
Thu, Aug. 4, 12:02 AM
Wed, Aug. 3, 10:50 AM
- Goldman Sachs downgrades Western Digital (WDC -0.3%) from Neutral to Sell. Price target lowered to $38 from $47 (current price $44.91), implying around 15% downside from the current level.
- From Goldman Sachs analyst Mark Delaney: "To the extent the stock trades higher on short-term events, we would use it as an opportunity to sell the stock given risks that we believe could pressure WD's business in the next few years. We expect HDD [hard disk drives] sales to decline secularly."
- Western Digital reported a $351M net loss and cited acquisition expense pressures in its Q4 report last Friday.
Fri, Jul. 29, 3:00 PM
Fri, Jul. 29, 10:53 AM
- Though beating expectations with 9.4% Y/Y revenue growth, Western Digital (WDC -9.9%) is not even three months removed from its acquisition of SanDisk and is seeing heavy operating expenses as a result.
- CEO Steve Milligan noted FY 16 as a "transformative year". He also commented on moving past an acquisition stage and into an execution phase.
- FY 16 revenue is $13B with net income of $257M vs. FY 15 revenue of $14.6B and $1.5B in net income.
- The company provided September quarter guidance for revenue of $4.4B-$4.5B, gross margin of around 32%, operating expenses of approximately $875M, interest and other expenses of around $245M, tax expense of $50M, share count of 290M and EPS of $0.85-$0.90.
- Press release
- Earnings call transcript
Thu, Jul. 28, 4:17 PM
Wed, Jul. 27, 5:35 PM
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