Western Digital Updates First Fiscal Quarter Expectations

[HardOCP News]

Western Digital Corp. today updated its expectations for the first fiscal quarter of 2017 ending Sept. 30, 2016. Following the recent acquisition of SanDisk and the continued progress in integrating its WD and HGST subsidiaries, the company is addressing a larger number of customers with a broader portfolio of hard drive and flash storage products, leading to a better-than-expected product mix. Enabled by ongoing strong execution, the company now expects its first quarter revenue to be in the range of $4.45 billion to $4.55 billion compared to its earlier forecast of $4.4 billion to $4.5 billion. Non-GAAP gross margin is expected to be approximately 33%, versus the earlier forecast of 32%, due to the improved mix and pricing. Non-GAAP operating expenses are expected to be approximately $905 million, versus the earlier forecast of $875 million, reflecting higher incentive compensation due to the stronger business performance. Net interest expense is forecasted to be lower than previously expected due to the recently completed re-pricing of the company's U.S. Term Loan B debt. The company now expects first quarter EPS, on a non-GAAP basis to be in the range of $1.00 to $1.05, compared with its earlier forecast range of $0.85 to $0.90. The company will report its full results for the first fiscal quarter in late October.