2018-04-26 13:10:04 | On The Fly: What to watch in data storage earnings reportsCompanies in the data storage sector are set to begin their earnings season with Western Digital (WDC) reporting fiscal third quarter earnings after the market close on Thursday, April 26 with a conference call scheduled for 5:30 pm ET. Seagate (STX), a Western Digital rival, is set to report Q3 results before the market open on Tuesday, May 1, with a conference call scheduled for 9:00 am ET. What to watch for: 1. GUIDANCE: Along with its last report, Western Digital guided for Q3 adjusted earnings per share in the range of $3.20-$3.30 on revenue of approximately $4.9B. At the time, analysts expected the company to report Q3 EPS of $3.04 on revenue of $4.94B, but those figures have since changed to $3.29 and $4.93B, respectively. Meanwhile, Seagate also provided its quarterly outlook in its last report, guiding for Q3 revenue to decline sequentially by 5%-7%. At the time, analysts expected the company to report Q3 revenue of $2.58B, but that figure has since risen to $2.6B. Seagate reported Q2 revenue of $2.91B. 2. BARCLAYS NOTE: In late March, Barclays analyst Mark Moskowitz raised his price target for Overweight-rated Western Digital to $120 from $110 and for Underweight-rated Seagate Technology to $55 from $45, saying it "could be a perfect storm" for hard-disk-drives. The analyst said at the time that better demand and mix dovetail with tight supply. Moskowitz added that while he missed the year-to-date rally in Seagate, his new price target suggests that the stock had largely adjusted for the better end market conditions. The analyst said at the time that he sees additional upside in Western Digital since the Toshiba (TOSBF) saga is in the past and the company's recent refinancing provides flexibility to resume its share buyback. 3. GARTNER PC SHIPMENTS: Global PC shipments totaled 61.7M units in Q1, a 1.4% decline from 1Q17, Gartner (IT) reported earlier this month. The PC market saw a 14th consecutive quarter of decline, dating back to the second quarter of 2012, Gartner reported. "The major contributor to the decline came from China, where unit shipments declined 5.7% year over year," said Mikako Kitagawa, principal analyst at Gartner. "This was driven by China's business market, where some state-owned and large enterprises postponed new purchases or upgrades, awaiting new policies and officials' reassignments after the session of the National People's Congress in early March." Western Digital and Seagate make components for PCs. | |
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