Western Digital Updates Fourth Fiscal Quarter Outlook and Reiterates Guide for Calendar Year 2017
June 26 2017 - 4:05PM
Business Wire
Western Digital Corp. (NASDAQ: WDC) today updated its
expectations for the fourth fiscal quarter of 2017 and reiterated
its non-GAAP earnings forecast of approximately $12 per share for
calendar year 2017.
The company now expects fourth quarter revenue of approximately
$4.8 billion, non-GAAP gross margin of approximately 41% and
non-GAAP earnings per share of $2.85. This compares with the prior
outlook provided on April 27 of revenue of approximately $4.8
billion, non-GAAP gross margin of approximately 40% and non-GAAP
earnings per share in the range of $2.55 to $2.65. The
better-than-anticipated profitability is being driven by continued
good execution and strong demand for the company’s broad portfolio
of storage products, particularly for flash-based devices and
solutions and the 10 terabyte helium capacity hard drives. On July
27, after the close of NASDAQ trading, the company will report its
full results for the fourth fiscal quarter ending June 30,
2017.
The company’s reiteration of its prior guidance to achieve
non-GAAP earnings per share of approximately $12 for the calendar
year 2017 is based on its current business outlook, leading product
and technology position, and capital structure.
Non-GAAP Financial Measures
This press release includes an update to the company’s financial
guidance relating to non-GAAP gross margin and non-GAAP diluted
earnings per share (“EPS”) for the fourth quarter of fiscal year
2017. Non-GAAP gross margin is a non-GAAP measure defined as
non-GAAP gross profit divided by GAAP revenue. The company’s
non-GAAP gross margin and EPS guidance exclude the amortization of
acquired intangible assets and stock-based compensation expense
estimated to be approximately $291 million in gross profit, or 6%
of gross margin, and $122 million in operating expenses, totaling
$413 million in net income, or $1.37 EPS for the fourth
quarter.
The timing and amount of additional charges the company excludes
from its non-GAAP financial measures, including employee
termination, asset impairment and other charges, charges to
implement cost saving initiatives, acquisition-related charges and,
in the case of non-GAAP EPS, related tax adjustments, are dependent
on the timing of certain actions and cannot be reasonably
predicted. In addition, the company’s estimate for the amortization
of acquired intangible assets is based on preliminary allocations
of the SanDisk purchase price and may be adjusted as the company
finalizes the valuation of these acquired assets. Accordingly,
reconciliations of non-GAAP gross margin and non-GAAP EPS to the
most directly comparable GAAP financial measures (gross margin and
diluted income per common share, respectively) are not available
without unreasonable effort.
These non-GAAP measures noted above are not in accordance with,
or an alternative for, measures prepared in accordance with GAAP
and may be different from non-GAAP measures used by other
companies. The company believes these non-GAAP measures provide
useful information to investors for measuring the company’s
earnings performance and comparing it against prior periods.
Specifically, the company believes these non-GAAP measures provide
useful information to both management and investors as they exclude
certain expenses, gains and losses that the company believes are
not indicative of its core operating results or because they are
consistent with the financial models and estimates published by
many analysts who follow the company and its peers. These non-GAAP
measures are some of the primary indicators management uses for
assessing the company’s performance and planning and forecasting
future periods. These measures should be considered in addition to
results prepared in accordance with GAAP, but should not be
considered a substitute for, or superior to, GAAP results.
About Western Digital
Western Digital is an industry-leading provider of storage
technologies and solutions that enable people to create, leverage,
experience and preserve data. The company addresses ever-changing
market needs by providing a full portfolio of compelling,
high-quality storage solutions with customer-focused innovation,
high efficiency, flexibility and speed. Our products are marketed
under the HGST, SanDisk and WD brands to OEMs, distributors,
resellers, cloud infrastructure providers and consumers. Financial
and investor information is available on the company's Investor
Relations website at investor.wdc.com.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, including statements concerning the company’s anticipated
financial results for its fourth fiscal quarter ending June 30,
2017 and calendar year 2017. These forward-looking statements are
based on management’s current expectations and are subject to risks
and uncertainties that could cause actual results to differ
materially from those expressed or implied in the forward-looking
statements. Other risks and uncertainties that could cause actual
results to differ materially from those expressed or implied in the
forward-looking statements include: uncertainties with respect to
the company's business ventures with Toshiba; volatility in global
economic conditions; business conditions and growth in the storage
ecosystem; impact of competitive products and pricing; market
acceptance and cost of commodity materials and specialized product
components; actions by competitors; unexpected advances in
competing technologies; our development and introduction of
products based on new technologies and expansion into new data
storage markets; risks associated with acquisitions, mergers and
joint ventures; difficulties or delays in manufacturing; and other
risks and uncertainties listed in the company’s filings with the
Securities and Exchange Commission (the “SEC”), including the
company’s Form 10-Q filed with the SEC on May 8, 2017, to which
your attention is directed. You should not place undue reliance on
these forward-looking statements, which speak only as of the date
hereof, and the company undertakes no obligation to update these
forward-looking statements to reflect new information or
events.
Western Digital, WD and SanDisk are registered trademarks or
trademarks of Western Digital Corporation or its affiliates in the
U.S. and/or other countries. Other trademarks, registered
trademarks, and/or service marks, indicated or otherwise, are the
property of their respective owners. © 2017 Western Digital
Corporation or its affiliates. All rights reserved.
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version on businesswire.com: http://www.businesswire.com/news/home/20170626006175/en/
Western Digital Corp.Media Contact:Jim Pascoe,
408.717.6999jim.pascoe@wdc.comorInvestor Contact:Bob Blair,
949.672.7834robert.blair@wdc.com
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