Western Digital stock slips 7.6%; Q2 outlook remains higher

Western Digital reported strong fiscal first-quarter results on October 22, but its stock traded at EUR 289.50 on Lang & Schwarz at 17:12 CET on Wednesday, November 4, 6.46 percent below the Xetra close of Tuesday, November 3, at EUR 309.50. The quote was also 8.02 percent below the EUR 314.73 price cited in the latest relevant AD HOC NEWS report from November 3, a separate comparison from the Xetra session move.

Western Digital's fiscal first quarter ended October 2. According to the AD HOC NEWS report, revenue reached USD 4.381 billion, up 55 percent from the year-earlier quarter and 17 percent from the preceding fiscal quarter.

Margins and Cash Flow Expand

GAAP gross margin rose to 57.8 percent from 43.5 percent a year earlier. Non-GAAP gross margin reached 58.1 percent, while non-GAAP operating margin widened to 49.1 percent from 30.4 percent.

Non-GAAP diluted earnings per share increased to USD 4.64 from USD 1.78. Operating cash flow reached USD 1.60 billion and free cash flow USD 1.38 billion, giving investors a stronger cash-generation benchmark as the company advances its storage portfolio.

Higher Guidance Sets Next Test

Management expects fiscal second-quarter revenue of USD 5.1 billion at the midpoint of a USD 5.0 billion to USD 5.2 billion range. Non-GAAP gross margin is forecast at 60 percent to 61 percent, while adjusted diluted earnings per share are expected at USD 5.80, plus or minus USD 0.20.

Chief Financial Officer Kris Sennesael linked the outlook to continued exabyte growth and improved pricing. The next operating test is whether demand for higher-capacity storage can support the projected margin expansion through the company's product transitions.

The board raised the quarterly cash dividend by 17 percent to USD 0.175 per share. Payment is scheduled for December 17, 2026, to shareholders of record at the close of business on December 4.

Investors can follow the real-time quote of Western Digital stock.

The S&P 500 remains the relevant broader market backdrop for US-listed Western Digital stock.

More news and analyses on Western Digital stock cover the company's earnings outlook and storage-demand developments.