Western Digital beats by $0.15, beats on revs; guides Q2 EPS above consensus, revs in-line; to separate its HDD and Flash businesses (38.97)
- Reports Q1 (Sep) loss of $(1.76) per share, excluding non-recurring items, $0.15 better than the FactSet Consensus of ($1.91); revenues fell 26.4% year/year to $2.75 bln vs the $2.66 bln FactSet Consensus.
- Co issues guidance for Q2 (Dec), sees EPS of $(1.35)-(1.05), excluding non-recurring items, vs. ($1.39) FactSet Consensus; sees Q2 revs of $2.85-3.05 bln vs. $2.93 bln FactSet Consensus.
- "Our Consumer and Client end markets continue to perform well and we now expect our Cloud end market to grow going forward. Our improved cost structure positions Western Digital to capitalize on enhanced earnings power as market conditions continue to improve."
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To Separate Business Units: Co also approves plan to separate its HDD and Flash businesses. Co says that creating two independent, public companies will better position each franchise to execute innovative technology and product development, capitalize on unique growth opportunities, extend respective leadership positions, and operate more efficiently with distinct capital structures.
- The separation is intended to be structured in a tax-free manner and is targeted for the second half of calendar year 2024.
- "Our HDD and Flash businesses are both well positioned to capitalize on the data storage industry's significant market dynamics, and as separate companies, each will have the strategic focus and resources to pursue opportunities in their respective markets. Importantly, separating these franchises will unlock significant value for Western Digital shareholders, allowing them to participate in the upside of two industry leaders with distinct growth and investment profiles," said David Goeckeler, CEO, Western Digital.
- Co has determined that to realize its full value, spinning off its Flash business is the best, executable alternative at this time.
- "Moving forward, as we progress through fiscal year 2024, we see an improving market environment in both businesses, and we will remain open to strategic opportunities that unlock further value in both our HDD and Flash investments and assets."