Western Digital's fiscal third quarter performance exceeded expectations, with revenue of $2.8 billion, non-GAAP gross margin of 11%, and a non-GAAP loss per share of $1.37.
The company saw signs of demand stabilizing across various end markets, including consumer, client, and cloud.
HDD revenue improved sequentially, driven by growth in capacity enterprise drives. The 22 terabyte CMR drive became the highest volume product among all 20 terabyte and above capacity points.
Flash revenue declined sequentially due to price declines, but the company delivered positive product gross margin, excluding underutilization charges, driven by its retail brands and low-cost flash supply from its joint venture fab with Kioxia.
Western Digital expects ongoing inventory digestion at cloud customers and a sustained decline in client demand in the fourth quarter. However, it is experiencing improved demand at certain customers in China and anticipates modest growth in bit shipments for Flash.
The strategic review process is ongoing, and updates will be provided as they become available.
Note: No information was provided regarding dividends or buybacks in the transcript.
Undervalued by 16.8% based on the discounted cash flow analysis.
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About Western Digital Corp.
CEO: David Goeckeler
Western Digital creates environments for data to thrive. As a leader in data infrastructure, the company is driving the innovation needed to help customers capture, preserve, access and transform an ever-increasing diversity of data. Eve...