Western Digital (NASDAQ:WDC) shares tanked by over 5% in the early session today after the data storage solutions provider announced its second-quarter results. Despite a 2.6% year-over-year decline, revenue of $3.03 billion exceeded estimates by $20 million. EPS of -$0.69 came in narrower than expectations by $0.43. However, this was the company’s fifth consecutive quarter of negative earnings.
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At the same time, Western Digital’s GAAP net loss narrowed to $268 million from $446 million in the year-ago period. It generated $92 million in operating cash flow in Q2 and ended the quarter with a cash pile of $2.48 billion. Sequentially, its Cloud revenue shot up by 23% to $1.08 billion, and Consumer revenue increased by 15% to $839 million. However, revenue from Clients ticked lower by 2% to $1.12 billion.
Notably, WDC is witnessing sequential improvements in shipments to data center customers, gains in flash ASPs, and flash bit shipments. For the upcoming quarter, the company expects revenue to be in the range of $3.20 billion to $3.40 billion. EPS for the quarter is seen landing between -$0.10 and $0.20.
What is the Future of WDC Stock?
Overall, the Street has a Strong Buy consensus rating on Western Digital, and the average WDC price target of $59.31 implies the stock may be hovering at fair valuation levels at present. That’s after a nearly 46% jump in the company’s share price over the past year.
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