Western Digital stock plunges despite earnings beat

Key Points
  • Western Digital Corporation reported its December earnings with EPS of $3.95 and revenue of $5.34 billion.
  • The stock dropped nearly 5 percent after-hours despite the earnings beat.
Steve Milligan, chief executive officer of Western Digital Corp.
Kiyoshi Ota | Bloomberg | Getty Images

Disk drive company Western Digital just reported its earnings for the December quarter. The stock dropped nearly 5 percent after-hours despite an earnings beat.

Here are the most important numbers:

  • Earnings per share of $3.95 versus $3.79 expected by Thomson Reuters.
  • Revenue of $5.34 billion versus $5.3 billion expected by Thomson Reuters.

The company's total revenue is up 9 percent year-over-year and CEO Steve Milligan said in a statement there was a "healthy demand" for Western Digital's enterprise hard drives and flash-based products.

The disk maker's net losses were $823 million, or a loss of $2.78 per share, compared to net income of $235 million, or $0.80 per share at the same time last year. The company says that the GAAP losses were due to a $1.6 billion charge related to new tax laws. The company also increased its headcount to 71,300 worldwide, an increase of 500 people since the same quarter last year.

This is Western Digital's first earnings report since ending a lengthy legal battle with Tokyo-based Toshiba. The two companies settled a fight over Toshiba's chip unit sale in December, an outcome that guaranteed Western Digital with a supply of memory chips.

Milligan said he was "pleased that we resolved our negotiations with our JV partner Toshiba in December and ensured our long term access to flash."

The period covered is the second quarter of the company's 2018 fiscal year, which ends in June.

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