Western Digital Earnings Approach

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S&P 500 (NYSE:SPY) component Western Digital (NASDAQ:WDC) will unveil its latest earnings on Monday, October 22, 2012. 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 $2.33 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 $2.39. Between one and three months ago, the average estimate moved down. It also has dropped from $2.38 during the last month. Analysts are projecting profit to rise by 15.5% versus last year to $9.01.

Past Earnings Performance: The company is looking to beat analyst estimates for the third quarter in a row. Last quarter, it beat estimates with net income of $3.35 per share against the mean estimate of $2.46. In the prior quarter, the company reported profit of $2.52.

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A Look Back: In the fourth quarter of the last fiscal year, profit rose more than fourfold to $745 million ($2.97 a share) from $158 million (67 cents a share) the year earlier, exceeding analyst expectations. Revenue rose 97.8% to $4.75 billion from $2.4 billion.

Wall St. Revenue Expectations: Analysts are projecting a rise of 48% in revenue from the year-earlier quarter to $3.98 billion.

Stock Price Performance: Between August 20, 2012 and October 16, 2012, the stock price had fallen $8.97 (-19.8%), from $45.32 to $36.35. 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:

On the top line, the company is looking to build on two-straight revenue increases with this earnings announcement. Revenue rose 34.8% in the third quarter of the last fiscal year before climbing again in the fourth quarter of the last fiscal year of the last fiscal year.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.77 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: There are mostly holds on the stock with 10 of 19 analysts surveyed giving that rating.

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

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