Wed, Aug. 12, 4:42 PM
- In compliance with the company's mandatory retirement-age policy for directors, Tom Pardun, 71, is stepping down from Western Digital's (NASDAQ:WDC) board following its November annual meeting. Pardun has been chairman for 10 years of Western's history, via two separate terms.
- Former chairman/CEO Matt Massengill, 54, will replace Pardun. In addition, Len Leuer, the CEO printer maker Memjet, will become lead independent director.
Tue, Aug. 4, 5:53 PM
Thu, Jul. 30, 9:12 AM
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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, 4:16 PM
Thu, Jul. 23, 10:25 AM
- Believing cloud data center spending growth is slowing, Morgan Stanley's Katy Huberty has downgraded Seagate (STX -1.1%) to Underweight, and Western Digital (WDC -1.3%) and QLogic (QLGC -0.7%) to Equal Weight.
- Regarding Seagate (recently issued a calendar Q2 warning thanks to PC weakness), Huberty estimates cloud-related sales account for as much as 12% of revenue, and a larger % of gross profit. Her FY16 (ends June '16) revenue and EPS estimates are now respectively 6% and 20% below consensus.
- Huberty sees similar challenges for Western, albeit while adding its (M&A-fueled) flash product investments will partly offset. Her FY16 (ends June '16) gross margin estimate has been cut to 28.7% from 31%.
- As for QLogic (also recently warned), the company's core Fibre Channel/Ethernet connectivity market is expected to see "normal to below normal seasonality." She now expects revenue to drop 3% Y/Y in 2015.
- Huberty's cloud spending remarks come after Google reported its capex (growing rapidly in recent years) fell 5% Y/Y in Q2 to $2.52B. Western reports on July 29, QLogic on July 30, and Seagate on July 31.
Thu, Jul. 9, 10:02 PM
- IDC estimates global PC shipments tumbled to 66.1M in Q2, falling at a sharper Y/Y clip than Q1's 6.7% and about 1% faster than expected. Gartner is slightly less harsh, estimating shipments fell 9.5% to 68.4M.
- Factors blamed for the decline: Inventory reductions ahead of the Windows 10 launch (set for July 29), a strong dollar (has led to higher overseas prices), and tough Y/Y comps caused by the 2014 boost in business PC sales caused by the end of Windows XP support. With tablet sales under pressure as well, tablet cannibalization is less of a factor than before ... but rising smartphone/tablet usage still appears to be taking a toll on PC upgrade rates.
- Gartner sees full-year shipments falling 4.4%. IDC still expects low-to-mid single-digit declines in 2H15, before volumes stabilize in future years. It sees the Windows 10 launch going "relatively well," but cautions Microsoft's (NASDAQ:MSFT) decision to provide free upgrades to Windows 7/8 users will limit its impact on PC sales.
- Continuing a recent trend, market leaders grabbed share from smaller rivals. IDC estimates #1 Lenovo's (OTCPK:LNVGY) share rose to 20.3% from 19.4% a year ago, #2 HP's (NYSE:HPQ) to 18.5% from 18.2%, and #3 Dell's to 14.5% from 14%. Acer (OTC:ASIYF) and Asus (OTC:AKCPF) are respectively given 6.6% and 6.5% shares
- Curiously, IDC has Apple (NASDAQ:AAPL) ranked #4 globally, with its share rising to 7.8% from 5.9% via 5.1M Mac shipments (could imply a 15%+ revenue share), but Gartner doesn't have the company in its top-5. IDC and Gartner respectively assign Apple 13.5% and 12.7% U.S. shares. In the past, IDC's Mac shipment estimates have been notably different from the quarterly figures Apple would later report.
- Near-term expectations for PC sales are already quite low, following Intel's (NASDAQ:INTC) Q1 warning, AMD's Q2 warning, Micron's (NASDAQ:MU) June 25 results/guidance, and plenty of other negative news. Intel's Q2 report arrives on July 15.
- Other PC industry names: NVDA, STX, WDC, HTCH
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.
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.
Thu, Jun. 25, 5:35 PM
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, 9:28 AM
- JPMorgan has downgraded Western Digital (NASDAQ:WDC) to Neutral, and cut its target by $13 to $92.
- WDC -1% premarket to $90.70. JPMorgan is only 2 months removed from launching coverage on Western at Overweight, arguing the company's cash balance, flash storage assets, and potential to get regulatory clearance to integrate Hitachi's former hard drive ops make it a better investment than Seagate.
Thu, May 28, 9:49 AM
- Believing its current valuation doesn't take into account strong enterprise/cloud demand, Goldman's Bill Shope has upgraded Western Digital (NASDAQ:WDC) to Buy, and hiked his target by $16 to $122. As is often the case, Seagate (NASDAQ:STX) is going in the same direction as Western.
- Shope: "We estimate that PCs will represent 38% of Western Digital's revenue in CY2015, down from nearly 70% in CY2007. As a result, PC volatility is not nearly as big of a driver of fundamentals as it once was." He forecasts PC-related shipments (hurt by both soft PC sales and SSD encroachment) will see a -9% CAGR from 2014-2016, and that enterprise shipments (lifted by cloud/analytics demand and Western's flash storage offerings) will see an 8% CAGR.
- Western currently trades for 12x estimated FY16 (ends June '16) EPS. Seagate goes for 11x estimated FY16 (ends June '16) EPS.
Tue, May 19, 12:11 PM
- FBR's Chris Rolland, after talking with Intel (INTC -1.2%) IR chief Gary Willihganz: "While excess PC inventory dynamics were well known exiting 2014, we believe many investors did not expect additional PC inventory drain into the Win10 release. Intel was careful to explain these nuanced inventory dynamics, which we believe may have also been a contributor to the weaker-than-expected ODM shipments witnessed in April."
- Rolland adds that while Intel "expects inventory replenishment in 2H15 around the Win10 release, it was careful to temper expectations for a surged uptick in demand." A Q1 CC remark from AMD CEO Lisa Su suggested Windows 10 (NASDAQ:MSFT), whose Start menu and enterprise-friendly features could help boost industry demand, will launch in late July.
- Also: Morgan Stanley says it's cautious on PC names in the near-term (moreso on chipmakers than other firms) given soft Q2 PC/hard drive inventory builds and weak April sales from ODMs. It sees normal seasonal growth following a rough Q1, and doesn't expect a recovery occurring before Q3.
- Micron (MU -2.1%), Seagate (STX -3.3%), and Western Digital (WDC -1.5%) are lower on a day the Nasdaq is near breakeven. Micron, which is close to its 52-week low, fell on Friday after Nomura cut estimates on PC DRAM pricing fears. Microsoft is down 0.7% after factoring its dividend payment (shares are trading ex-dividend today).
Tue, May 5, 11:46 PM
Tue, Apr. 28, 6:33 PM
- In addition to missing FQ3 estimates, Western Digital (NASDAQ:WDC) has guided on its CC for FQ4 revenue of $3.3B-$3.4B and EPS of $1.50-$1.60, below a consensus of $3.64B and $1.92. Not surprisingly, much of the blame is placed on weak PC sales.
- FQ3 gross margin (non-GAAP) was 30.1%, down 40 bps Q/Q and flat Y/Y. Western has set a broad FQ4 GM guidance range of 27%-32%. Operating expenses fell 2% Y/Y to $591M, and $240M was spent on buybacks.
- Desktop hard drive shipments fell by 3.1M Y/Y to 13.5M, and notebook drives by 3M to 18.8M. Enterprise drives (high-margin, lifted by Web/cloud demand) rose by 400K to 7.5M; branded drives (also high-margin) fell by 100K to 6.1M; consumer electronics drives rose fractionally to 8.6M.
- Western estimates the total addressable market (TAM) for hard drives fell to 125M from FQ2's 140.8M and the year-ago period's 138.1M. 60% of revenue came from non-PC products, up from 53% a year ago. Enterprise SSD revenue rose to $224M from FQ2's $187M and the year-ago period's $134M.
- Shares have fallen to $94.50 AH. Seagate provided light guidance 11 days ago.
- FQ3 results, PR, datasheet (.pdf)
WDC vs. ETF Alternatives
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.
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