Western Digital Second Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Western Digital (NASDAQ:WDC) will unveil its latest earnings tomorrow, Wednesday, January 23, 2013. Western Digital designs, develops, manufactures, and sells hard drives.

Western Digital Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for profit of $1.82 per share, a rise of more than twofold from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved down from $2.47. Between one and three months ago, the average estimate moved down. It has risen from $1.80 during the last month. Analysts are projecting profit to rise by 0.9% compared to last year’s $7.73.

Past Earnings Performance: The company’s quarterly results have come in above estimates for the last three quarters. Last quarter, the company booked net income of $2.36 per share versus a mean estimate of profit of $2.31 per share.

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A Look Back: In the first quarter, profit rose more than twofold to $519 million ($2.06 a share) from $239 million ($1.01 a share) the year earlier, exceeding analyst expectations. Revenue rose 49.8% to $4.04 billion from $2.69 billion.

Here’s how Western Digital traded following its last earnings report 3 months ago and leading up to its upcoming earnings report this week:

WDC

Wall St. Revenue Expectations: Analysts are projecting a rise of 84% in revenue from the year-earlier quarter to $3.68 billion.

Stock Price Performance: Between November 16, 2012 and January 16, 2013, the stock price had risen $10.73 (31%), from $34.58 to $45.31. The stock price saw one of its best stretches over the last year between August 1, 2012 and August 13, 2012, when shares rose for nine straight days, increasing 12.4% (+$4.90) 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.

Key Stats:

This upcoming earnings announcement will be a chance to build on positive earnings momentum over the last three quarters. Net income rose more than threefold in the third quarter of the last fiscal year and more than fourfold in the fourth quarter of the last fiscal year before increasing again in the first quarter.

On the top line, the company is looking to build on three-straight revenue increases heading into this earnings announcement. Revenue increased 34.8% in the third quarter of the last fiscal year and 97.8% in the fourth quarter of the last fiscal year before climbing again in the first quarter.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.94 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.

Analyst Ratings: With eight analysts rating the stock as a buy, one rating it as a sell and nine rating it as a hold, there are indications of a bullish outlook.

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