Core Viewpoint - Western Digital (WDC.US) shares surged over 12% in pre-market trading, reaching $154.9, with the potential to hit a historical high following the release of its Q1 FY2026 earnings report [1] Financial Performance - Revenue for Q1 FY2026 increased by 27.4% year-over-year to $2.82 billion, surpassing analyst expectations of $2.74 billion [1] - Adjusted earnings per share (EPS) were reported at $1.78, exceeding analyst forecasts of $1.58 [1] - Free cash flow improved significantly to $599 million, compared to a negative $61 million in the same period last year [1] Future Guidance - The company anticipates Q2 revenue to be between $2.8 billion and $3.0 billion, with adjusted EPS expected to range from $1.73 to $2.03 [1] - Analyst expectations for Q2 revenue and adjusted EPS are $2.83 billion and $1.74, respectively [1]

Group 1: Earnings Reports - Exxon Mobil Corp. is expected to report quarterly earnings of $1.82 per share on revenue of $87.71 billion [2] - Apple Inc. reported fourth-quarter revenue of $102.47 billion, exceeding analyst estimates of $102.17 billion, with earnings of $1.85 per share, beating estimates of $1.76 per share [2] - Chevron Corp. is anticipated to post quarterly earnings of $1.71 per share on revenue of $49.01 billion [2] - Amazon.com Inc. reported third-quarter net sales of $180.2 billion, a 13% year-over-year increase, surpassing the consensus estimate of $177.8 billion [2] - Western Digital Corp. issued strong second-quarter earnings guidance, expecting adjusted earnings between $1.73 and $2.03 per share, compared to estimates of $1.71 per share [2] Group 2: Stock Performance - Exxon Mobil shares fell 0.3% to $114.30 in after-hours trading [2] - Apple shares gained 2.3% to $277.75 in after-hours trading [2] - Chevron shares fell 0.2% to $153.20 in after-hours trading [2] - Amazon shares jumped 13.2% to $252.18 in after-hours trading [2] - Western Digital shares surged 10.4% to $152.50 in after-hours trading [2]

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Group 1 - Western Digital's stock rose over 10% after it was highlighted as a global leader in NAND storage [1] - HDD manufacturers, including Western Digital and Seagate, have not planned to expand production lines, leading to a supply shortage in HDDs due to the growing demand for AI storage [1] - The lead time for NLHDD has dramatically increased from a few weeks to over 52 weeks, exacerbating the storage gap for CSPs [1] Group 2 - The current market demand gap for cold data storage is approximately 180-200EB, prompting CSPs to accelerate the adoption of SSDs over HDDs [1] - Industry forecasts suggest that large-capacity QLC SSD shipments may experience explosive growth by 2026 [1] - Samsung Electronics anticipates that HBM sales in 2026 will significantly exceed this year's figures, with plans to expand HBM production [1] Group 3 - The AI-driven memory semiconductor supercycle is expected to be more prolonged and robust than previous boom periods, with supply shortages potentially lasting 3-4 years [1] - TrendForce reports that DRAM prices are expected to increase by 8-13% quarter-over-quarter in the fourth quarter, with older process DRAM prices seeing substantial growth [1] Group 4 - Key storage module manufacturers include De Ming Li, Jiang Bo Long, Bai Wei Storage, Shannon Chip Creation, and Kai Pu Cloud [2] - Advanced storage manufacturers include Zhaoyi Innovation, Hengshuo Co., and Beijing Junzheng [2] - NAND manufacturers include Zhaoyi Innovation and Dongxin Co., while overseas manufacturers include Micron, SanDisk, and Western Digital [2]

Core Viewpoint - Western Digital reported strong Q3 2025 results, exceeding analyst expectations in revenue, operating profit, and earnings per share, leading to a significant increase in stock price [1][2]. Financial Performance - Q3 revenue reached $2.82 billion, a year-over-year increase of 27.4%, surpassing analyst expectations of $2.74 billion by 2.8% [1]. - Adjusted earnings per share (EPS) were $1.78, exceeding the forecast of $1.58 by 12.9% [1]. - Adjusted operating profit was $856 million, above the expected $756.4 million, with an operating margin of 30.4%, exceeding expectations by 13.2% [1]. - Free cash flow improved significantly to $599 million, compared to a negative $61 million in the same quarter last year [1]. - Inventory turnover days increased to 80 days, up from 76 days in the previous quarter [1]. Market Environment - The CEO highlighted strong operational performance driven by growing demand for cloud data storage [2]. - Western Digital has experienced a decline in revenue over the past five years, averaging a 9.4% annual decrease, indicating relatively lower business quality compared to industry standards [2]. - The semiconductor industry is characterized by cyclical trends, necessitating preparedness for alternating periods of high growth and revenue contraction [2]. Future Outlook - Analysts project a 14.9% revenue growth for Western Digital over the next 12 months, indicating stronger momentum from new products and services [3]. - The rise of generative AI is expected to significantly impact large enterprises, with Western Digital gaining market attention despite being less known compared to giants like NVIDIA and AMD [3]. - Current inventory turnover days stand at 80, which is 34 days lower than the five-year average, suggesting no immediate signs of excessive inventory buildup [3].

Western Digital reported first-quarter fiscal 2026 results that topped expectations on both revenue and earnings. ...

Core Insights - Western Digital (NASDAQ: WDC) reported fiscal Q1 2026 earnings, exceeding investor expectations once again [1] Financial Performance - The company demonstrated strong financial results in its latest earnings report, contributing to positive investor sentiment [1]

Core Insights - Western Digital (WDC) reported quarterly earnings of $1.78 per share, exceeding the Zacks Consensus Estimate of $1.59 per share, and matching the earnings from the previous year [1] - The earnings surprise was +11.95%, with the company having surpassed consensus EPS estimates in all four quarters of the past year [2] Financial Performance - The company generated revenues of $2.82 billion for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 3.54%, but down from $4.1 billion year-over-year [3] - Western Digital has also exceeded consensus revenue estimates in the last four quarters [3] Stock Performance - Since the beginning of the year, Western Digital shares have increased by approximately 137.1%, significantly outperforming the S&P 500's gain of 17.2% [4] Future Outlook - The company's earnings outlook is crucial for investors, with current consensus EPS estimates at $1.70 for the upcoming quarter and $6.67 for the current fiscal year [8] - The Zacks Rank for Western Digital is currently 1 (Strong Buy), indicating expectations for the stock to outperform the market in the near future [7] Industry Context - The Computer-Storage Devices industry, to which Western Digital belongs, is currently ranked in the top 15% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [9]

Group 1 - The company, Western Digital, forecasts second-quarter earnings that exceed Wall Street estimates, indicating a positive outlook for its financial performance [1] - The anticipated increase in earnings is attributed to higher demand for data storage products, driven by cloud providers expanding their data center capacity [1]

Revenue and Sales Performance - Net revenue for the three months ended October 3, 2025, increased by 27% to $2,818 million from $2,212 million in the prior year, driven by a 3% increase in units sold and a 19% increase in average selling price per unit [131][132]. - Cloud revenue rose by 31% to $2,510 million, primarily due to a 5% increase in units sold and a 19% increase in average selling price per unit, reflecting higher shipments of high-capacity enterprise products [133]. - The top 10 customers accounted for 77% of net revenue, up from 65% in the prior year, indicating increased customer concentration [136]. - Net sales for the three months ended October 3, 2025, were $1,158 million, while net sales for the year ended June 27, 2025, totaled $5,249 million [170]. - Intercompany revenue for the three months ended October 3, 2025, was $1,715 million, up from $1,378 million for the year ended June 27, 2025 [170]. Profitability and Income - Gross profit increased by $421 million, resulting in a gross margin improvement of 7 percentage points year-over-year, attributed to higher volumes and improved pricing [137]. - Operating income for the three months ended October 3, 2025, was $792 million, a 137% increase from $334 million in the prior year [131]. - Gross profit for the three months ended October 3, 2025, was $459 million, representing a gross margin of approximately 39.6% [170]. - Operating income for the three months ended October 3, 2025, was $107 million, compared to $279 million for the year ended June 27, 2025 [170]. - Net income for the three months ended October 3, 2025, was $550 million, a significant recovery from a net loss of $320 million for the year ended June 27, 2025 [170]. Expenses and Investments - Research and development expenses rose by $32 million to $294 million, driven by higher variable compensation and continued investment in innovation [138]. - Selling, general and administrative expenses decreased by $66 million to $138 million, reflecting lower compensation and benefits as well as reduced marketing activities [139]. - Net cash used in investing activities for the three months ended October 3, 2025, was primarily $73 million in capital expenditures [154]. Cash Flow and Financing - For the three months ended October 3, 2025, net cash provided by operating activities was $672 million, a significant increase from $34 million for the same period in 2024 [148]. - The company reported a net decrease in cash and cash equivalents of $66 million for the three months ended October 3, 2025 [148]. - Net cash used in financing activities for the three months ended October 3, 2025, included $553 million for share repurchases [155]. - The company issued $1.60 billion of convertible senior notes in November 2023, maturing on November 15, 2028, with an annual interest rate of 3.00% [165]. - As of October 3, 2025, the company had $1.25 billion available for borrowing under its revolving credit facility maturing in January 2027 [167]. Taxation and Liabilities - The effective tax rate for the three months ended October 3, 2025, was 12%, significantly lower than the U.S. Federal statutory rate of 21%, due to the mix of earnings and the tax-free gain on the retained Sandisk interest [145]. - As of October 3, 2025, the liability for unrecognized tax benefits was $598 million, with $130 million potentially payable within the next twelve months [159]. - The company has accrued Global Minimum Tax (GMT) taxes of $21 million, expected to be paid in Q2 2028 [172]. - Current liabilities decreased to $3,317 million from $3,800 million, indicating a reduction of 12.7% [170]. - Non-current liabilities slightly decreased to $2,848 million from $2,873 million, a decline of 0.9% [170]. Future Expectations - The company expects to monetize its remaining stake in Sandisk within one year from the Separation Date, which occurred on February 21, 2025 [127]. - The company expects capital expenditures for 2026 to be approximately 4% to 6% of net revenue [149]. Insurance and Risk Management - The company maintains director and officer insurance to cover certain liabilities arising from indemnification agreements [175].