Western Digital Corp said on Thursday it expected revenue to improve in the second half and Could cut costs, after Submitting lower-than-expected quarterly results Because of waning demand for its data storage devices used in smartphones.
The company’s shares reversed course following the comments on a post-earnings call to exchange 8 percent higher in trading. They dropped as much as 5 percent earlier.
Chief Executive Officer Stephen Milligan stated on the call that the company expected revenues to improve in the latter portion of 2019 as cloud computing clients go back to more normal buying patterns and demand from its other businesses enhance.
“WDC’s expectation for the second half have raised investor expects,” said Kevin Cassidy, an analyst with Stifel Nicolaus and Co..
Western Digital is targeting $800 million (approximately Rs. 5,700 crores) in annualised reductions in non-GAAP cost and expenditures, Milligan stated on the post-earnings call, adding that the company is accelerating the closing of a plant.
“NAND flash price is near the bottom in 1Q19 or 1H19. I expect price reductions to outpace price decline in 2H19,” said Summit Insight Group analyst Kinngai Chan.
Investors have been watching Western Digital’s consequences after South Korea’s SK Hynix, the world’s second-biggest memory chipmaker, flagged a challenging first half due to US-China trade frictions along with China’s slowing economy.
Adding to the gloomy prognosis, Intel Corp on Thursday prediction current-quarter revenue and profit below analysts’ estimates and missed fourth-quarter sales expectations because of a slowing China.
Analysts on average were expecting $3.88 billion and earnings of 97 cents per share, according to IBES data from Refinitiv.
For the second quarter, the business reported a adjusted earnings of $1.45 per share.
Analysts on average had expected a profit of $1.51 per share and revenue of $4.26 billion, according to IBES data from Refinitiv.