| | | Western Digital says flash memory has reached 'cyclical trough,' earnings send stock higher
4:42 PM ET 7/31/19 | MarketWatch
Western Digital says flash memory has reached 'cyclical trough,' earnings send stock higher
Western Digital Corp. (WDC) wrapped up a fiscal year in which the memory specialist lost three-quarters of a billion dollars on Wednesday by proclaiming that the market for flash memory "has reached a cyclical trough." Western Digital reported fiscal fourth-quarter losses of $197 million, or 67 cents a share, on sales of $3.63 billion, a sharp decline from earnings of $2.46 a share on sales of $5.1 billion. After adjusting for stock-based compensation, charges for a power outage and a host of other costs, the company claimed earnings of 17 cents a share. Analysts on average expected adjusted earnings of 17 cents a share on sales of $3.66 billion. For the full year, Western Digital posted a loss of $754 million on sales of $16.57 billion, down from profit of $675 million on sales of $20.65 billion in fiscal 2018, as a buying spree for memory chips the year before turned into a drought. Shares enjoyed a spike in after-hours trading, though, as Chief Executive Steve Milligan spoke positively of a rebound. "We are seeing signs of improving conditions in the flash market and believe that it has reached a cyclical trough," Milligan said in Wednesday's announcement. "With continuing expectations for a positive demand environment, a robust product portfolio and expanding customer engagements, we expect to deliver improving financial results as we move through fiscal 2020." Western Digital projected first fiscal-quarter revenue of $3.8 billion to $4 billion with adjusted earnings of 15 cents to 35 cents a share, largely in line with analyst estimates. Shares gained more than 3% in after-hours trading, after closing with a 4.8% decline at $53.89. The stock is down 23.2% in the past year, as the S&P 500 index has gained 7%.
-Jeremy C. Owens; 415-439-6400; AskNewswires@dowjones.com
> Dow Jones Newswires
July 31, 2019 16:42 ET (20:42 GMT)
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PPS seems to have stabilized around $55.50 in the AH.
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