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Western Digital Corporation (WDC)

  • Thu, Oct. 29, 1:15 PM
    • Western Digital's (WDC +1.7%) FQ1 results were roughly in-line with the outlook provided in its Oct. 21 pre-announcement (provided while announcing the SanDisk deal). The company guided on its earnings call (transcript) for FQ2 revenue of $3.3B-$3.4B and EPS of $1.50-$1.60, below a consensus of $3.45B and $1.75.
    • Western is nonetheless trading higher. Archrival Seagate (STX -2.9%), which issued an FQ1 warning on Oct. 15 (enterprise share loss to Western is believed to be the culprit) and reports on Friday morning, is selling off.
    • Western's gross margin fell 90 bps Q/Q and 120 bps Y/Y in FQ1 to 28.9%; it's expected to rise "slightly" in FQ2. $60M was spent on buybacks; Western has said it will suspend its buyback (while keeping its dividend) on account of the SanDisk deal.
    • Hard drive shipments totaled 51.7M - 15.8M notebook, 11.7M desktop, 11.5M consumer, 5.6M branded, 7.2M enterprise - up from 48.5M in FQ4 and down from 64.7M a year ago. 66% of revenue came from non-PC markets, up from 55% a year ago (the SanDisk deal will further increase that number). Enterprise SSD revenue was $233M vs. $244M in FQ4 and $156M a year ago.
    • On the earnings call (transcript), Western noted demand for high-capacity enterprise hard drives (beloved by Internet giants) was "somewhat softer than anticipated" due to the "absorption of previously deployed storage assets." Regardless, it still expects a 35% enterprise capacity CAGR through 2020.
    • The company echoes others in declaring it sees "some signs of stabilization" in PC demand. Ahead of the SanDisk deal (will boost Western's SSD share and lower its flash costs), Western also reports seeing "a very competitive market" in enterprise SSDs.
    • Western's FQ1 results, PR, datasheet (.pdf)
    | Thu, Oct. 29, 1:15 PM | 6 Comments
  • Wed, Oct. 21, 8:00 AM
    • SanDisk (NASDAQ:SNDK) +5.2% premarket after agreeing to be acquired by Western Digital (NASDAQ:WDC) in a cash and stock deal valued at ~$19B, confirming earlier speculation.
    • The $86.50/share offer represents a 15% premium to yesterday's closing price for SNDK.
    • WDC says the acquisition will double its market and expand its participation in higher-growth segments, and enable it to vertically integrate into NAND; CEO Steve Milligan will continue to serve as CEO of the combined company.
    • WDC -3.1% premarket.
    • Earlier: SanDisk beats by $0.29, beats on revenue
    | Wed, Oct. 21, 8:00 AM | 4 Comments
  • Mon, Oct. 19, 4:42 PM
    • Six days after reporting SanDisk (NASDAQ:SNDK) has talked with Micron (NASDAQ:MU) and Western Digital (NASDAQ:WDC) about a potential sale, Bloomberg reports SanDisk is in advanced sale talks with Western.
    • Negotiations are said to have "accelerated" over the weekend. A deal could be reached as soon as this week.
    • Western has been viewed by analysts as a smoother fit than Micron, given it's not currently a NAND flash manufacturer - with many thinking Western needs to become one to insure itself against hard drive cannibalization by SSDs - and SanDisk and Micron respectively having NAND alliances with Toshiba and Intel.
    • SNDK +8.3% after hours. WDC -3.1%. MU -1.3%. Micron joined SanDisk in rallying last week following Bloomberg's original report, fueled by expectations a deal would improve Micron's NAND scale and IP, and potentially lead to more favorable industry pricing.
    • Earlier today: SanDisk gains following Korean site's M&A report
    | Mon, Oct. 19, 4:42 PM | 32 Comments
  • Mon, Oct. 19, 9:18 AM
    • More than three years after Western Digital (NASDAQ:WDC) closed its acquisition of Hitachi's hard drive unit (HGST), China's Ministry of Commerce has approved integrating the business with Western Digital proper.
    • The company will continue selling products under both the HGST and Western Digital brands, and maintain separate sales teams for two years. However, it plans to start integrating "corporate and other key functions, including [R&D], heads and media operations, engineering and manufacturing."
    • HGST president Mike Cordano has been appointed to the newly-created position of COO. Western president Jim Murphy will now run the company's storage devices unit.
    • Western is up 3.6% premarket. Archrival Seagate (NASDAQ:STX), hit hard last week by an FQ1 warning that some analysts argued indicates enterprise share loss to Western, is down 1.2%.
    • Update (10:39AM ET): Western has given back its early gains. Seagate is down 2%.
    | Mon, Oct. 19, 9:18 AM | 3 Comments
  • Thu, Oct. 15, 9:17 AM
    • Seagate (NASDAQ:STX) now expects to report FQ1 revenue of $2.9B vs. prior guidance of $2.9B-$3.1B and a $3.03B consensus. Unit shipments are expected to total 47M - up from FQ4's 45.3M but down from 59.5M a year ago - with Seagate maintaining a 40% share (implies a total market of 117.5M).
    • Gross margin (non-GAAP) is now expected to be at 24%, below prior guidance of 27% and down from 27.2% in FQ4 and 28.1% a year ago. Seagate blames lower-than-expected demand for 4TB and 6TB nearline hard drives. An 8TB product was recently announced.
    • FQ1 op. cash flow is expected to total $800M. 20M shares were repurchased.
    • CEO Steve Luczo: "While Seagate had strong operating cash flows and made significant progress in cost containment in the September quarter, we are disappointed we did not execute a product portfolio that fully addressed the demand in the nearline market. Looking ahead, we are confident that our nearline product portfolio will be fully competitive by our fiscal third quarter."
    • Full FQ1 results arrive on the morning of Oct. 30. Western Digital (NASDAQ:WDC), recently rumored to have held buyout talks with SanDisk, is following Seagate lower. Seagate also issued an FQ4 warning in July.
    | Thu, Oct. 15, 9:17 AM | 3 Comments
  • Tue, Oct. 13, 5:07 PM
    • Sources tell Bloomberg SanDisk (NASDAQ:SNDK) is in talks with Micron (NASDAQ:MU) and Western Digital (NASDAQ:WDC) about a possible acquisition. No decision has been made.
    • Acquiring SanDisk, which partners closely with Toshiba (OTCPK:TOSBF) on NAND flash manufacturing, would turn Micron (NAND partnership with Intel) into a heavyweight within the NAND market - Samsung and SanDisk/Toshiba are currently the market's biggest players. Micron received 32% of its August quarter revenue from flash, and 60% from DRAM. The company has been betting on 3D NAND and 3D XPoint to strengthen its flash position.
    • Western has made several smaller flash-related acquisitions, as it tries to offset the gradual encroachment of SSDs/flash storage on hard drives. However, none of the buyout targets were comparable in scale to SanDisk, and Western still depends on 3rd-party NAND suppliers who also compete with the company in the SSD market.
    • SanDisk +11.5% after hours to $68.90. Micron +2.6% to $18.65. Western +0.8% to $85.00.
    • Earlier: SanDisk jumps on reported sale effort
    | Tue, Oct. 13, 5:07 PM | 50 Comments
  • Wed, Sep. 30, 12:43 PM
    | Wed, Sep. 30, 12:43 PM | 10 Comments
  • Wed, Sep. 30, 9:13 AM
    | Wed, Sep. 30, 9:13 AM | Comment!
  • Wed, Sep. 30, 7:23 AM
    • China's Unis will pay $92.50 per share for a block of newly-issued Western Digital (NASDAQ:WDC) stock, and will own 15% of the company after the deal closes. Unis will also gain the right to put one of its people on the board.
    • There's a five-year lock-up on the shares and Unis loses the board seat if its ownership stake falls below 10%.
    • Source: Press Release
    • Shares +5.2% to $73.
    | Wed, Sep. 30, 7:23 AM | 2 Comments
  • Fri, Sep. 18, 11:48 AM
    • Longbow Research thinks hard drive shipments have trailed PC shipments in 2015, making a positive inventory corrective possible. The firm considers expectations for a Q3 addressable market (TAM) of 115M units achievable - Western Digital previously estimated (.pdf) a Q2 TAM of 111M, down sharply from 138M a year earlier - and sees potential upside to 120M.
    • Seagate (STX -1.9%) and Western Digital (WDC -3.3%) are nonetheless selling off on a day the Nasdaq is down 0.5%. Seagate is 8 days removed from announcing it's cutting 1,050 jobs in response to "the current macroeconomic business environment."
    • Related ticker: HTCH
    • Last week: Citi, Wells Fargo report seeing stabilizing PC demand
    | Fri, Sep. 18, 11:48 AM | 9 Comments
  • Thu, Jul. 30, 9:12 AM
    | Thu, Jul. 30, 9:12 AM | 7 Comments
  • Wed, Jul. 29, 6:39 PM
    • Western Digital (NASDAQ:WDC) has guided on its FQ4 call for FQ1 revenue of $3.2B-$3.3B and EPS of $1.50-$1.60, below a consensus of $3.5B and $1.76. However, a light outlook was expected following Seagate's warning and a deluge of soft PC data.
    • Western has risen to $83.11 AH. Seagate (NASDAQ:STX) has risen to $50.74 ahead of Friday morning's FQ4 report.
    • Western's FQ4 results, PR
    | Wed, Jul. 29, 6:39 PM | Comment!
  • Mon, Jul. 6, 9:53 AM
    • Cautious Cleveland Research remarks about near-term hard drive demand have led Seagate (NASDAQ:STX) and Western Digital (NASDAQ:WDC) to slump out of the gate. The Nasdaq is down 0.4%. This isn't the first time a downbeat Cleveland note has had such an effect.
    • Seagate/Western fell two weeks ago after JPMorgan downgraded Western to Neutral, while citing weak PC sales. Both companies also sold off a few days later thanks to Micron's results/guidance.
    | Mon, Jul. 6, 9:53 AM | 4 Comments
  • Fri, Jun. 26, 8:20 AM
    • Intel (NASDAQ:INTC) is down 1.7% premarket, Seagate (NASDAQ:STX) is down 1.4%, and Western Digital (NASDAQ:WDC) is down 1.1% after Micron (down 15.1%) missed FQ3 estimates and provided soft FQ4 guidance, while largely blaming PC weakness and its impact on DRAM prices. SanDisk is also off.
    • Intel, Seagate, and Western have already seen a decent amount of PC-related concerns priced in. The industry is counting on Windows 10 (launches on July 29) and Intel's Skylake CPU platform (expected to begin rolling out in late summer) to spark a rebound.
    | Fri, Jun. 26, 8:20 AM | 8 Comments
  • Thu, Jun. 25, 5:35 PM
    | Thu, Jun. 25, 5:35 PM | 9 Comments
  • Tue, Jun. 23, 3:59 PM
    • Western Digital (NASDAQ:WDC) fell below $89 in regular trading following a morning JPMorgan downgrade to Neutral, and has once more pulled archrival Seagate (NASDAQ:STX) in the same direction.
    • JPMorgan's Rod Hall cites weak PC sales as his reason for downgrading Western. "We continue to see little evidence of an improvement in PC fundamentals. We also note negative comments on PC demand from HP, Avago, and Micron over the last month." Oddly, he suggests Intel's Skylake CPU launch (expected to start in late summer) is another reason to be pessimistic, arguing it will, if anything, push out a seasonal demand pickup.
    • Hall now expects industry hard drive shipments to fall 10.2% in 2015 to 507M, and 2.3% in 2016 to 495M. ASPs are expected to rise from $58.6 in 2014 to $60.1 in 2015 and $61.2 in 2016, thanks to a mix shift towards costlier enterprise/cloud drives.
    • Goldman upgraded Western to Buy in late May, while estimating PCs will only account for 38% of 2015 revenue.
    | Tue, Jun. 23, 3:59 PM | Comment!
Company Description
Western Digital Corp is a developer, manufacturer and provider of data storage solutions that enable consumers, businesses, governments & other organizations to create, manage, experience & preserve digital content. Its products include HDDs and SSDs.
Sector: Technology
Country: United States