Western Digital Quarterly Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Western Digital (NASDAQ:WDC) will unveil its latest earnings on Wednesday, July 25, 2012. Western Digital designs, develops, manufactures, and sells hard drives.

Western Digital Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for profit of $2.46 per share, a rise of more than threefold from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved up from $2.25. Between one and three months ago, the average estimate moved up. It has dropped from $2.53 during the last month. For the year, analysts are projecting net income of $7.62 per share, a rise of more than twofold from last year.

Past Earnings Performance: The company topped estimates last quarter, reporting a profit of $2.52 per share against a mean estimate of net income of $1.58 per share.

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A Look Back: In the third quarter, profit rose more than threefold to $483 million ($1.96 a share) from $146 million (62 cents a share) the year earlier, exceeding analyst expectations. Revenue rose 34.8% to $3.04 billion from $2.25 billion.

Wall St. Revenue Expectations: Analysts are projecting a rise of 77.1% in revenue from the year-earlier quarter to $4.25 billion.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.64 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company regressed in this liquidity measure from 3.48 in the second quarter to the last quarter driven in part by an increase in liabilities. Current liabilities increased more than twofold to $4.54 billion while assets rose 37.9% to $7.45 billion.

Key Stats:

On the top line, the company is hoping to build on a revenue increase last quarter. Revenue fell 19.4% in the second quarter after increasing in the third quarter.

Stock Price Performance: Between April 25, 2012 and July 20, 2012, the stock price fell $11.07 (-25.7%), from $43.14 to $32.07. The stock price saw one of its best stretches over the last year between January 17, 2012 and January 25, 2012, when shares rose for seven straight days, increasing 13% (+$4.31) over that span. It saw one of its worst periods between April 2, 2012 and April 11, 2012 when shares fell for seven straight days, dropping 8.8% (-$3.69) over that span.

Analyst Ratings: With nine analysts rating the stock as a buy, none rating it as a sell and nine rating it as a hold, there are indications of a bullish outlook.

Competitors to Watch: Seagate Technology PLC, EMC, STEC, Inc., SanDisk, Dot Hill Systems Corp., Overland Storage, Inc., Hutchinson Technology Incorporated, Quantum Corporation, and OCZ Technology Group Inc.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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