Tue, Jan. 27, 8:14 PM
- Western Digital (NASDAQ:WDC) guided on its FQ2 CC for FQ3 revenue of $3.6B-$3.7B and EPS of $1.90-$2.00, mostly below a consensus of $3.73 and $1.99. With shares having already plunged over the last two days due to Seagate's outlook and Microsoft's numbers, investors are giving the hard drive giant a pass.
- FQ2 gross margin was 30.5%, up from 30.1% in FQ1 and the year-ago period, and above guidance for GM to be flat Q/Q. Western is also guiding for GM to be roughly flat Q/Q in FQ3.
- Notably, Western puts the total addressable market for hard drives in calendar Q4 at 140.8M units, less than the 144M-145M estimated by Seagate. That implies an FQ2 share of 43.4%, down from 44% in FQ1 and 44.4% a year ago. Average shipped drive capacity rose to 1.09TB from 1.00TB in FQ1 and 874GB a year ago. ASP was at $60.
- $309M was spent on buybacks, boosting EPS. R&D spend rose 2% to $426M, and SG&A spend 27% to $164M.
- FQ2 results, PR, prepared remarks, factsheet (.pdf)
Tue, Jan. 27, 4:17 PM
Mon, Jan. 26, 5:35 PM
Mon, Jan. 26, 10:00 AM
- In addition to slightly missing FQ2 revenue estimates (while posting in-line EPS), Seagate (NASDAQ:STX) has guided on its CC for FQ3 revenue of "at least $3.45 billion," unfavorable to a $3.59B consensus.
- FQ2 gross margin was 28.2%, +10 bps Q/Q but -40 bps Y/Y, and below (per Needham) a consensus of 28.6%. Seagate forecasts an FQ3 GM of 28.5%.
- Seagate estimates the addressable market (TAM) for hard drives was 144M-145M in FQ2, down from 147M in FQ1 and up from 142M a year earlier. The company pegs its share at 40%. Hard drive ASP fell by $1 Y/Y to $61.
- Two weak spots in FQ2: Consumer electronics hard drive shipments fell 9% to 6.1M, and branded drive shipments (high-margin) fell 3% to 6M. PC drive shipments rose 4% Y/Y to 36.6M, with notebook growth offsetting a desktop decline, and enterprise shipments (high-margin) rose 17% to 9.1M.
- $18M was spent on buybacks. Not counting a $620M gain recorded for an arbitration award, opex rose 6% Y/Y.
- Archrival Western Digital (WDC -7.2%) and hard drive assembly supplier Hutchison (HTCH -4.5%) are following Seagate lower. Western reports tomorrow afternoon, and Hutchison on Wednesday morning.
- Seagate's FQ2 results, PR, earnings slides (.pdf)
Tue, Jan. 6, 10:34 PM| Comment!
Oct. 28, 2014, 5:24 PM
- Western Digital (NASDAQ:WDC) guides on its FQ1 CC (webcast) for FQ2 revenue of $3.75B-$3.85B and EPS of $2.00-$2.10, below a consensus of $3.9B and $2.20.
- The oulook is overshadowing Western's FQ4 beat. Seagate (NASDAQ:STX), which moved higher yesterday following its FQ1 beat and slightly above-consensus FQ2 guidance, is following Western lower.
- FQ1 results, PR
Oct. 28, 2014, 4:17 PM
Oct. 27, 2014, 2:25 PM
- Seagate (STX +1.3%) guided on its FQ1 CC (transcript) for FQ2 revenue of $3.7B, slightly above a $3.68B consensus. The company expects a hard drive addressable market (TAM) of 145M units. The market totaled 148M units in FQ1, above initial guidance of 142M-146M.
- Gross margin is expected to rise slightly Q/Q, in spite of the margin pressured caused by the Xyratex and Avago deals. FQ1 GM was 28.1%, down 40 bps Q/Q and Y/Y. The acquisitions led opex to rise 20% Y/Y to $595M.
- $183M was spent to buy back 3M shares. Over the last 8 quarters, Seagate's share count has fallen by 59M to 327M.
- With the help of strong demand from Web/cloud giants, enterprise drive shipments (higher-margin overall) rose 9% Y/Y to 8.8M. Desktop drives -11% to 18.7M; notebooks +17% to 20.2M; consumer electronics -3% to 6M; branded drives (also higher-margin) +12% to 5.1M.
- Seagate pegs its FQ1 hard drive share at 40%, up from 38% in FQ4 and even with a year ago.
- Western Digital (WDC +1.4%) is getting a lift from Seagate's numbers; it reports tomorrow afternoon.
- FQ1 results, PR, earnings slides (.pdf)
Jul. 30, 2014, 4:19 PM
May. 1, 2014, 10:06 AM
- Like Seagate (STX -4%), Western Digital (WDC -6.1%) missed FQ3 revenue estimates while beating EPS forecasts. Also like Seagate, it offered light FQ4 guidance on its CC (transcript): Revenue of $3.5B-$3.6B and EPS of $1.65-$1.75 vs. a consensus of $3.72B and $1.89.
- While Seagate estimates March quarter industry hard drive shipments totaled 138M, Western pegs them at 137M. More importantly, the company expects shipments to fall to 130M in the June quarter.
- Goldman notes hyperscale data center owners (Google, Facebook, Amazon, etc.) are getting more efficient with their storage usage, and that this is affecting both Western and Seagate. Seagate is also dealing with inventory issues at enterprise storage OEMs; Western isn't reporting anything similar.
- With SSDs continuing to encroach on hard drives, Western's enterprise SSD sales grew to $134M (+46% Y/Y, still less than 4% of sales) in FQ3, and are expected to outgrow the broader market going forward. Non-PC applications made up 53% of total revenue.
- Western's ASP fell $2 Q/Q to $58 due to.a mix shift towards console hard drive sales. In spite of the ASP drop, gross margin was 30.1%, flat Q/Q and up 90 bps Y/Y, and above guidance of 29.5%. A 29.5% GM is forecast for FQ4.
- $244M was spent on buybacks, up from $150M in FQ2. Free cash flow was $536M vs. $539M a year ago.
- Hard drive controller supplier Marvell (MRVL -1%) is off moderately.
Apr. 30, 2014, 4:35 PM| Comment!
Apr. 30, 2014, 12:45 PM
- In addition to missing FQ3 revenue estimates (while beating on EPS), Seagate (STX -1.3%) guided on its CC (transcript) for FQ4 revenue of "at least" $3.3B, unfavorable to a $3.4B consensus. Gross margin is expected to slip to 28% from an FQ3 level of 28.5% due to seasonality.
- In its earnings slides (.pdf), Seagate estimates industry hard drive shipments totaled 138M in FQ3, down 4M Q/Q but up 2M Y/Y. The company expects unit demand to be "down a few points" in FQ4, but also forecasts 140M-145M shipments for the following two quarters.
- With the industry having consolidated around Seagate, Western Digital (WDC +0.8%), and Toshiba, pricing is expected to be "relatively stable" in FQ4, and price pressure "benign" in 2H14.
- High-margin enterprise drive shipments rose by 200K Y/Y to 7.7M. Desktop shipments managed to grow by 200K to 19.8M after many quarters of declines, but notebook shipments fell another 600K to 16.4M. Consumer electronics shipments fell 400K to 5.4M, and high-margin branded drive shipments rose 200K to 5.9M.
- $184M was spent on buybacks in FQ3. Free cash flow fell to $319M from $713M in FQ2 and $452M a year ago.
- For once, Western isn't following Seagate lower; the company reports after the close. Assembly supplier Hutchison (HTCH -1.4%) is down slightly.
- FQ3 results, PR
Jan. 27, 2014, 6:07 PM
- In addition to missing FQ2 estimates, Seagate (STX) has guided on its CC for FQ3 revenue of "at least" $3.4B; that compares unfavorably with a consensus of $3.46B.
- Seagate estimates the total addressable market (TAM) for hard drives stood at 142M (same as Western Digital) in the December quarter, up by 2M Q/Q and 6M Y/Y. The company estimates its share was 40%, flat Q/Q but down from 43% a year ago.
- FQ2 gross margin was 28%, flat Q/Q and up 100 bps Y/Y. $1.5B was spent on buybacks, thanks to the Samsung deal.
- Enterprise shipments (higher-margin) +7% to 7.8M, desktops -12% to 19.2M, notebooks -2% to 16.9M, consumer electronics +20% to 6.7M, branded drives (also higher-margin) +3% to 6.2M.
- Western Digital (WDC) is ticking lower in sympathy with Seagate. The shoe was on the other foot last week.
- Seagate's earnings slides
Jan. 22, 2014, 6:22 PM
- Though it beat FQ2 (Dec. quarter) estimates, Western Digital (WDC) has guided on its CC for FQ3 revenue of $3.65B-$3.75B and EPS of $1.80-$1.90, mostly below a consensus of $3.73B and $1.95. The company blames a seasonally weaker hard drive market and lower factory utilization.
- Western is down 2% AH. Archrival Seagate (STX), which reports on Monday, is down 2.1%, as is hard drive/SSD controller supplier Marvell (MRVL).
- Western estimates the total addressable market (TAM) for hard drives was 142M in FQ2; that's slightly above guidance for TAM to be roughly flat with an FQ1 level of 139M. Gaming was an area of strength, no doubt thanks to the Xbox One/PS4 launches.
- FQ2 gross margin was 30.1%, +30 bps Q/Q and +140 bps Y/Y, and slightly better than guidance. FQ3 gross margin is expected to be near the midpoint of Western's 27%-32% model range (implies 29.5%).
- $150M was spent on buybacks, and 54% of revenue came from non-PC applications. ASP rose by $2 Q/Q to $60, thanks to a stronger mix of branded drive and distributor sales.
- FQ2 results, PR, prepared remarks, datasheet
Jan. 22, 2014, 4:17 PM| 1 Comment
Jan. 22, 2014, 12:10 AM
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Western Digital Corp is a developer, manufacturer & provider of data storage solutions that enable consumers, businesses, governments & other organizations to create, manage, experience & preserve digital content. Its product include; HDDs and SSDs.
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