Western Digital Profit Falls 81%
April 28 2016 - 6:00PM
Dow Jones News
Western Digital Corp. said its earnings fell 81% in the latest
quarter as sales and margins weakened.
Shares fell 4.4% to $44.09 in recent after-hours trading as
per-share earnings, excluding certain one-time items, and revenue
were at the lower end of the company's expectations and fell short
of Wall Street estimates.
The Irvine, Calif., disk-drive maker is acquiring rival SanDisk
Corp. The companies unveiled their deal in October, promoting the
combination of Western Digital's leading position in hard drives
and SanDisk's strength in the growing market for flash memory chips
needed for smartphones and cloud computing. The tie-up plans came
amid a rush of chip makers combining in attempts to boost margins
and expand their reach.
In its earnings release Thursday, Western Digital reiterated
that it expects the SanDisk acquisition to be completed in the June
quarter. Investors likely will be listening on the conference call
for more details about the pending combination.
Over all, for the period ended April 1, Western Digital reported
a profit of $74 million, or 32 cents a share, down from $384
million, or $1.63 a share, a year earlier. Excluding asset
writedowns and other one-time items and other items, adjusted
per-share earnings fell to $1.21 from $1.87. Revenue decreased 21%
to $2.82 billion.
The company had projected per-share profit of $1.20 to $1.30 and
revenue of $2.8 billion to $2.9 billion.
Analysts polled by Thomson Reuters had expected per-share
earnings of $1.29 on revenue of $2.86 billion.
Gross margin fell to 26.7% from 29.1%.
SanDisk on Wednesday reported that its first-quarter earnings
doubled and easily topped expectations.
Write to Tess Stynes at tess.stynes@wsj.com
(END) Dow Jones Newswires
April 28, 2016 17:45 ET (21:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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