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Western Digital: Fourth Quarter 2022 Earnings Update

Industry: Hardware
Current: Company Performance

Western Digital reported a decline in revenues of 8% year-over-year in Q2 2022
Western Digital reported GAAP earnings per share (EPS) of $0.95
The management expects the revenues to be in the range of $3.6 billion to $3.8 billion in the first quarter of fiscal year 2023

On August 5, 2022, Western Digital reported Q4 revenues of $4.53 billion (a decline of 8% year-over-year) on non-GAAP earnings per share (EPS) of $1.78.

Summary: Western Digital’s Q4 2022 revenues declined by 8% as compared to the same period in 2021. Western Digital reports its revenues across three segments: Client, Cloud, and Consumer.

Client segment’s revenues declined by 13.6% vs 2021
Consumer segment’s revenues declined by 23% vs 2021 owing to a broad-based decline in retail products across HDD and Flash.
Cloud segment’s revenues grew by 5.2% vs 2021 owing to the increased sales of Flash and enterprise SSD (7% YoY growth in sales of 18-terabyte and 20-terabyte drives).

The company reported earnings from operations of $562 million during Q4 2022, resulting in GAAP operating margins of 12%. On the bottom line, the company reported a GAAP EPS of $0.95, whereas the Non-GAAP earnings came to $1.78 per share.

Guidance: For the first quarter of the fiscal year 2023 the management has guided to:

Total revenue is estimated to be in the range of $3.6 billion to $3.8 billion (both GAAP and non-GAAP basis).
Gross margin is estimated to be from 27.1% to 29.1% (on a GAAP basis) and 27.5% to 29.5% on a non-GAAP basis.
Operating expenses are expected to be in the range of $870 million to $890 million (on a GAAP basis) and in the range of $760 million to $780 million on a non-GAAP basis.
Non-GAAP to be in the range of $0.35 - $0.65

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