Western Digital Corporation (WDC): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

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Summary:
Western Digital reported better-than-expected fourth-quarter fiscal 2014 results. However, year-over-year comparisons were unfavorable primarily due to a fall in HDD prices and soft demand from the enterprise segment. The company provided a tepid revenue and earnings guidance citing seasonal factors. Nonetheless, the shift toward non-PC applications, secular growth of digital data, growing exposure to the SMB segment and pending MOFCOM approval are long-term positives. Additionally, modest growth in TAM and higher demand for storage are expected to result in a positive earnings surprise in the upcoming quarter. Although strategic acquisitions in the SSD segment are expected to expand its offerings, competition from Seagate and SanDisk cannot be discounted. Thus, we reiterate our Neutral recommendation in the stock.

Overview:

Western Digital Corporation (WDC), headquartered in Irvine, CA, is one of the largest hard disk drive (HDD) producers in the U.S. The company designs, develops, manufactures and markets a broad range of HDDs used in desktop PCs, servers, network-attached storage devices, video game consoles, digital video recorders and a host of other consumer electronic devices.

The company markets its products under HGST, WD and G-Technology brands. The company operates through two independent subsidiaries HGST and WD.

Western Digital sells hard drives of 3.5-inch and 2.5-inch form factors with storage capacities ranging from 30 gigabytes (GB) to 6 terabytes (TB). The company's solid-state drives (SSDs) include 2.5-inch, mSATA, MO-297 and CompactFlash form factors, with storage capacities ranging from 128 megabytes (MB) to 400 GB. The company also provides WD software applications, such as WD Photos and WD 2GO to the mobile computing market. The company's solutions are compatible with Apple's iOS, Google's Android and Microsoft's Windows Platforms.


The company markets its products and solutions through original equipment manufacturers (OEMs), distributors and retailers. In FY14, the company generated 54% of revenues from Asia, 21% from Europe Middle East Africa (EMEA) and the remaining 25% from the Americas.

The company competes with other hard drive manufacturers with offerings in the desktop, notebook, enterprise computer, consumer electronic devices and external storage markets. Western Digital mainly competes with companies like Fujitsu Limited, Hitachi Global Storage Technologies, Samsung Electronics Co. Ltd., Seagate Technology and Toshiba Corporation.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Stocks

Referenced Stocks: GB , WDC

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