Western Digital Corporation (NASDAQ:WDC) shares were trading higher Friday but have since revered and began trading lower after the company reported better-than-expected second-quarter financial results and issued third-quarter guidance above estimates on Thursday after the market closed.
Results Beat Estimates, Margins Expand and Guidance Tops Consensus
Western Digital reported adjusted earnings per share of $2.13, beating the consensus estimate of $1.92. In addition, the company reported revenue of $3.01 billion, beating the consensus estimate of $2.92 billion.
Western Digital said second-quarter performance reflected disciplined execution amid demand tied to the AI-driven data economy.
The company reported gross margin expansion in the quarter, with GAAP gross margin of 45.7% and non-GAAP gross margin of 46.1%.
Western Digital reported cash flow from operations of $745 million and free cash flow of $653 million. The company said it returned more than 100% of free cash flow to shareholders through share repurchases and dividend payments.
CEO Irving Tan said the company's results reflected strong execution to meet customer demand for reliable, high-capacity hard disk drives at scale, adding that Western Digital continues to see confidence from customers operating in the AI-driven data economy.
The company expects third-quarter adjusted earnings per share of $2.15 to $2.45, versus the consensus estimate of $1.96. Furthermore, Western Digital anticipates revenue of $3.10 billion to $3.30 billion, versus the consensus estimate of $2.95 billion.
Western Digital Stock Falls
WDC Price Action: At the time of writing, Western Digital stock is trading 4.27% lower at $266.53, according to data from Benzinga Pro.
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