SAN JOSE, CA – West Digital The shares of Corp. (NASDAQ:) fell 5% as the company’s fourth-quarter revenue fell short of Wall Street expectations, and expectations for the first quarter of 2025 came in lower than analyst expectations.
The data storage giant reported fourth-quarter earnings of $1.44 per share, beating the consensus estimate of $1.16. However, revenue for the quarter was $3.76 billion, slightly missing the analyst target of $3.74 billion. Compared to the same period last year, revenue increased 41% to $2.672 billion, indicating significant year-over-year (year-over-year) growth.
Looking ahead, Western Digital expects first-quarter 2025 earnings to be between $1.55 and $1.85 per share, with the midpoint below the consensus estimate of $1.76. The company also forecasts revenue between $4 billion and $4.2 billion for the coming quarter, which is lower than the analyst consensus of $4.23 billion.
In their post-earnings note, Summit Insights Group analysts downgraded the stock to Hold, citing their belief that “further improvements in profitability are now limited.”
“We believe the storage sector has emerged from the cyclical downturn and is now entering a phase of moderate supply constraint, prompting industry buyers to make strategic purchases to ensure supply,” they noted.
David Goeckeler, CEO of Western Digital, commented on the results, highlighting the company’s diversified portfolio and strategic roadmap that align with the recovery in end markets. “We are structurally improving profitability throughout the cycle for both Flash and HDD,” said Goeckeler. He also highlighted the transformative period driven by the AI Data Cycle, which is expected to increase demand for storage solutions.
Western Digital’s cloud revenue showed a robust increase of 21% quarter-over-quarter (QoQ), while customer revenue grew 3%. However, consumer sales saw a decline of 7% quarter on quarter. For fiscal 2024, the company reported total revenue of $13 billion, up 6% year over year.
Western Digital’s financial health remains solid, ending the quarter with $366 million in operating cash inflows and $1.88 billion in total cash and cash equivalents. The company’s strategic focus and technology leadership position the company to capitalize on growth opportunities in the evolving digital landscape, despite the current market reaction to financial guidance.
