Western Digital Corporation (NASDAQ:WDC) reported better-than-expected fourth-quarter results on Wednesday, surpassing Wall Street estimates for both earnings and revenue. However, the storage technology company’s shares fell more than 14% in premarket trading on Thursday as investors were left unimpressed by its forward guidance despite it exceeding consensus forecasts.
Adjusted earnings per share came in at $3.56, beating analyst expectations of $3.29 by $0.27. Quarterly revenue reached $3.75 billion, ahead of the consensus estimate of $3.69 billion.
Revenue for the fiscal fourth quarter increased 44% compared with the same period a year earlier, while adjusted earnings per share more than doubled year over year.
Outlook exceeds expectations but fails to excite investors
For the first quarter of fiscal 2027, Western Digital expects earnings per share of between $3.85 and $4.15, compared with analysts’ consensus forecast of $3.77.
The company also projected revenue of $4.0 billion to $4.2 billion, above the market expectation of $4.04 billion. At the midpoint of its guidance, Western Digital expects first-quarter revenue of $4.1 billion, adjusted earnings per share of $4.00 and a non-GAAP gross margin of between 55% and 56%.
Despite issuing guidance above consensus estimates, investors appeared to have expected an even stronger outlook, triggering a sharp decline in the share price before the market opened.
Strong demand continues to support growth
Bank of America analysts described the results as “WDC delivered a strong beat/raise,” while maintaining their Buy rating on the stock. They cited the “secular growth of HDD market, favorable supply/demand balance, strong EB growth driven by mix & further gross margin upside,” although the bank reduced its price target to $720 from $732.
Western Digital attributed its performance to expanding global demand for data storage, stronger gross and operating margins, and disciplined execution across its business.
For the full fiscal year 2026, revenue rose 36% to $12.92 billion. Non-GAAP diluted earnings per share increased to $10.22, compared with $5.02 in fiscal 2025.
Chief Executive Irving Tan said, “WD concluded fiscal year 2026 with strong performance. In our fiscal fourth quarter, revenue increased 44% year over year, gross and operating margins expanded, and earnings per share more than doubled.”
Dividend maintained
The board declared a quarterly cash dividend of $0.15 per share, payable on 17 September 2026 to shareholders of record as of 8 September 2026.
Western Digital stock price
