Western Digital Stock Falls Despite Better Than Expected December Quarter

WDC stock fell late Thursday after data storage company Western Digital (WDC) reported a narrower-than-expected loss for its December quarter, with revenue just squeaking past expectations.

Western Digital said it lost an adjusted 69 cents per share on $3.03 billion in fiscal second-quarter sales. On average, analysts polled by FactSet expected the disk drive and memory-chip maker to post an adjusted loss of $1.12 per share with sales of $3 billion.

During the year-earlier period, Western Digital lost an adjusted 42 cents per share and the company reported $3.1 billion in sales.

For the current quarter, Western Digital forecast sales of $3.3 billion at the midpoint of its range. Analysts expected $3.15 billion, according to FactSet.

In recent after-hours trading on the stock market today, WDC stock fell more than 3% to 58.15.

WDC Stock: Winning Streak Heading Into Earnings

Western Digital has struggled as demand for memory chips cooled in the past couple years. This is the company’s seventh consecutive quarter with a year-over-year sales decrease. Further, the company has posted losses each quarter since its September 2022-ended period.

But shares have rallied in recent months. As of market close Thursday, WDC stock had gained nearly 40% since the end of October. The company on Oct. 30 announced a plan to split its business in two, separating it flash-memory and traditional hard-drive businesses. The company set a target date for the second-half of this year when it announced the plan.

Analysts like the idea, and believe WDC stock will benefit as the market recovers. Morgan Stanley analyst Joe Moore earlier this week named WDC stock his top pick, displacing Nvidia (NVDA). He cited the company’s plan to split the business and its “compelling” valuation compared to peer Seagate Technology (STX).

That helped add to a hot run for the stock. WDC shares have closed higher eight consecutive sessions, according to Dow Jones Market Data.

Prior to Thursday’s report, IBD Stock Checkup showed Western Digital stock with a Relative Strength Rating of 94 out of a best-possible 99, indicating WDC stock outperformed 94% of the market over the past 12 months.

On the other hand, WDC stock has a dismal EPS Rating of 4 out of a best-possible 99, representing its earnings slowdown.

Those scores contribute to an IBD Composite Rating of 68 out of a best-possible 99.