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Jan. 28, 2022, 8:16 a.m. EST

Western Digital stock plummets as supply-chain problems ding outlook

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By Wallace Witkowski

Western Digital Inc. shares plummeted in the extended session Thursday after the data-storage products company issued a weak outlook because of supply-chain problems in the face of strong demand.

Western Digital /zigman2/quotes/204213617/composite WDC +5.70% shares dropped more than 8% after hours, following a 1.4% decline in the regular session to close at $53.84.

The company forecast earnings of $1.50 to $1.80 a share on revenue of $4.45 billion to $4.65 billion for the fiscal third quarter, while analysts surveyed by FactSet were calling for earnings of $1.94 a share on revenue of $4.75 billion.

“I’m proud of the Western Digital team for delivering another quarter of strong results that exceeded guidance, even in the midst of ongoing supply-chain disruptions and COVID-related challenges,” said David Goeckeler, Western Digital’s chief executive, in a statement. “While we continue to experience strong demand across our end markets, these challenges continue to present a headwind to near-term results.”

The company reported fiscal second-quarter net income of $564 million, or $1.79 a share, compared with $62 million, or 20 cents a share, in the year-ago period. Adjusted earnings, which exclude stock-based compensation expenses and other items, were $2.30 a share, compared with 69 cents a share in the year-ago period.

Revenue rose to $4.83 billion to $3.94 billion in the year-ago quarter.

Analysts surveyed by FactSet had forecast earnings of $2.13 a share on revenue of $4.81 billion.

Read: The pandemic PC boom gave personal computers their biggest year in nearly a decade

So far, weak outlooks for the March-ending quarter risk becoming a drumbeat for the tech sector at large, given this week’s earnings reports.

On Thursday, KLA Corp. /zigman2/quotes/209248041/composite KLAC +6.34% shares fell in the extended session after the chip-equipment maker’s outlook fell short of Wall Street expectations. That’s a day after rival Lam Research Corp. /zigman2/quotes/208077897/composite LRCX +6.18% fell short of expected revenue for the quarter and issued a weaker-than-expected forecast because of supply-chain problems, and its shares dropped 6.9% in Thursday trading.

On Wednesday, Intel Corp.’s /zigman2/quotes/203649727/composite INTC +3.06% forecast was also weaker than expected and Wall Street voiced concern about PC sales falling off . Intel shares fell 7% on the day.

Read: Chip sector flirting with bear-market territory as semiconductor earnings kick off

The whole chip sector marched toward bear-market territory on Wednesday with the PHLX Semiconductor Index /zigman2/quotes/210598361/realtime SOX +5.01% finishing down 4.8%, at 3,249.99, on the day, compared with a 0.5% decline by the S&P 500 index /zigman2/quotes/210599714/realtime SPX +2.02% .

A drop below 3,231.61 marks a 20% decline from the SOX index’s closing high of 4,039.51 on Dec. 27.

/zigman2/quotes/204213617/composite
US : U.S.: Nasdaq
$ 61.19
+3.30 +5.70%
Volume: 4.96M
May 17, 2022 4:00p
P/E Ratio
10.60
Dividend Yield
0.00%
Market Cap
$18.13 billion
Rev. per Employee
$292,454
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/zigman2/quotes/209248041/composite
US : U.S.: Nasdaq
$ 351.51
+20.97 +6.34%
Volume: 1.66M
May 17, 2022 4:00p
P/E Ratio
17.06
Dividend Yield
1.19%
Market Cap
$49.33 billion
Rev. per Employee
$764,943
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/zigman2/quotes/208077897/composite
US : U.S.: Nasdaq
$ 512.27
+29.80 +6.18%
Volume: 1.64M
May 17, 2022 4:00p
P/E Ratio
16.02
Dividend Yield
1.17%
Market Cap
$66.93 billion
Rev. per Employee
$1.18M
loading...
/zigman2/quotes/203649727/composite
US : U.S.: Nasdaq
$ 44.40
+1.32 +3.06%
Volume: 28.60M
May 17, 2022 4:00p
P/E Ratio
7.38
Dividend Yield
3.29%
Market Cap
$176.15 billion
Rev. per Employee
$641,652
loading...
/zigman2/quotes/210598361/realtime
US : Nasdaq
3,066.50
+146.44 +5.01%
Volume: 345,106
May 17, 2022 5:16p
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/zigman2/quotes/210599714/realtime
US : S&P US
4,088.85
+80.84 +2.02%
Volume: 2.46B
May 17, 2022 4:54p
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