NEW YORK (TheStreet) -- Western Digital Corp. (WDC) - Get Western Digital Corporation Report stock is rising 0.89% to $67.77 in mid-morning trading on Wednesday, ahead of the company's fiscal 2016 first quarter financial report, expected today after the market close.
The data storage solutions manufacturer is expected to report a year-over-year decline in earnings and revenue, but preliminary results suggest the company may beat estimates.
Analysts have estimated earnings of $1.56 per share, down from earnings of $2.10 per share that the company reported for the fiscal 2015 first quarter.
Revenue is expected to decline 15.7% year-over-year to $3.32 billion for the quarter, from $3.94 billion for the same period last year.
Last week, Western Digital reported preliminary earnings of $1.56 per share on revenue of $3.4 billion for the latest quarter.
The company also announced last week that it agreed to acquireSanDisk Corp. (SNDK) in a cash and stock deal valued at about $19 billion.
Separately, TheStreet Ratings team rates WESTERN DIGITAL CORP as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
We rate WESTERN DIGITAL CORP (WDC) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. At the same time, however, we also find weaknesses including deteriorating net income, a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue fell significantly faster than the industry average of 37.5%. Since the same quarter one year prior, revenues fell by 14.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- WESTERN DIGITAL CORP's earnings per share declined by 31.3% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, WESTERN DIGITAL CORP reported lower earnings of $6.17 versus $6.69 in the prior year. This year, the market expects an improvement in earnings ($6.69 versus $6.17).
- The share price of WESTERN DIGITAL CORP has not done very well: it is down 21.64% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Computers & Peripherals industry average. The net income has significantly decreased by 33.1% when compared to the same quarter one year ago, falling from $423.00 million to $283.00 million.
- You can view the full analysis from the report here: WDC