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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 +5.22% 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 +6.95% 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 +6.84% 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 +1.77% 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 +5.06% 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 +2.39% .

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

US : U.S.: Nasdaq
$ 58.45
+2.90 +5.22%
Volume: 3.25M
May 13, 2022 4:00p
P/E Ratio
Dividend Yield
Market Cap
$18.30 billion
Rev. per Employee
US : U.S.: Nasdaq
$ 336.42
+21.87 +6.95%
Volume: 1.98M
May 13, 2022 4:00p
P/E Ratio
Dividend Yield
Market Cap
$50.21 billion
Rev. per Employee
US : U.S.: Nasdaq
$ 491.92
+31.49 +6.84%
Volume: 1.91M
May 13, 2022 4:00p
P/E Ratio
Dividend Yield
Market Cap
$68.24 billion
Rev. per Employee
US : U.S.: Nasdaq
$ 43.60
+0.76 +1.77%
Volume: 32.03M
May 13, 2022 4:00p
P/E Ratio
Dividend Yield
Market Cap
$178.28 billion
Rev. per Employee
US : Nasdaq
+143.16 +5.06%
Volume: 347,528
May 13, 2022 5:16p
+93.81 +2.39%
Volume: 2.54B
May 13, 2022 4:57p

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