Western Digital Corporation WDC is set to report fiscal third-quarter 2025 results on April 30, before the closing bell. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
The Zacks Consensus Estimate for earnings is pegged at $1.17 per share, which moved up 13.6% in the past 60 days. WDC reported a loss per share of 63 cents in the prior-year quarter.
The consensus estimate for revenues is currently pegged at $2.24 billion, indicating a fall of 35.2% from the prior-year quarter’s figure.
The company's earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 54.4%. Shares of the company have lost 41.6% in the past year compared with the Computer-Storage Devices industry's decline of 40.5%.
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Key Factors at Play for WDC’s Q3 Earnings
Western Digital’s fiscal third-quarter performance is likely to have been supported by strong HDD momentum, fueled by rising nearline demand and improved pricing from cloud customers. As it expands UltraSMR adoption among major customers and completes the qualification and scaling of its latest drives, the company expects to strengthen margins in the to-be-reported quarter. It expects to drive the gross margin for HDD by nearly 50 basis points as the average price per unit continues to trend higher on a sequential basis.
AI-driven applications, particularly the tailwinds in generative AI, require massive amounts of storage — both high-speed flash and large-capacity HDDs. Companies building AI models need robust storage infrastructures. Potential positives include higher demand for nearline HDDs used in AI training data centers, growth in SSDs optimized for AI workloads and increased OEM and cloud customer purchases. Western Digital’s capitalizing on AI-related demand could be a major catalyst.
To further expand its Flash business, in February 2025, the firm completed the separation of its HDD and Flash businesses into two independent, publicly traded companies, each with a specific focus on its respective market. With a deep understanding of memory and storage technology, the new SanDisk is ready to meet market demands. It is well-equipped to take advantage of AI opportunities while maximizing the value of its products for both consumers and businesses.
The company’s HAMR development remains on track, with testing underway at two major hyperscale customers as announced at Investor Day event (February 2025). With its strong ePMR and UltraSMR portfolio, and upcoming HAMR gains, WDC is helping customers plan for the future with scalable, cost-effective storage solutions.
Western Digital Corporation Price and EPS Surprise
Western Digital Corporation Price and EPS Surprise
Western Digital Corporation price-eps-surprise | Western Digital Corporation Quote
However, over the past year, the flash memory market has experienced significant pricing pressure due to oversupply and weakening demand, especially in consumer electronics. Weakness in the PC and smartphone markets could weigh on consumer segment sales.
Management anticipates fiscal third-quarter Flash sales to fall by mid-teens percentage sequentially, with a decline in gross margin due to lower blended ASPs, higher cost per bit and underutilization charges ranging from $20 million to $30 million as it manages supply. Flash bit production is projected to fall sequentially by a mid-single-digit percentage. For HDD, it anticipates a sequential revenue decline of mid-to-high single digits due to lower volume.
Key Recent Development
On April 17, 2025, Western Digital partnered with Microsoft, CMR, and PedalPoint Recycling to run a pilot program that recycled about 50,000 pounds of old hard drives and parts. They used a new, eco-friendly sorting method without the need for acid. This process recovered rare earth elements and valuable metals like gold, copper, aluminum and steel. These materials were reused in the U.S. supply chain to support industries like electric vehicles, wind turbines and electronics, all while cutting down on environmental impact.
What the Zacks Model Says About WDC
Our proven model does not conclusively predict an earnings beat for Western Digital this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here.
Western Digital presently has an Earnings ESP of +3.42% and a Zacks Rank #5 (Strong Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Here are three stocks you may want to consider, as our model shows that these have the right elements to post an earnings beat in this reporting cycle.
Sprouts Farmers Market, Inc. SFM currently has an Earnings ESP of +0.44% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Sprouts Farmers Market is scheduled to report quarterly earnings on April 30. The Zacks Consensus Estimate for SFM’s to-be-reported quarter’s earnings and revenues is pegged at $1.53 per share and $2.19 billion, respectively. Shares of SFM have gained 148.9% in the past year.
Expeditors International of Washington EXPD has an Earnings ESP of +3.76% and a Zacks Rank #3 at present. EXPD is scheduled to report first-quarter 2025 earnings on May 6.
The Zacks Consensus Estimate for first-quarter 2025 revenues and earnings are pegged at $2.43 billion and $1.30 per share, respectively. EXPD’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, with the average surprise being 11.6%.
Church & Dwight Co. CHD has an Earnings ESP of +0.66% and a Zacks Rank #3 at present. CHD is scheduled to report first-quarter 2025 earnings on May 1.
The Zacks Consensus Estimate for first-quarter 2025 revenues and earnings are pegged at $1.51 billion and 89 cents per share, respectively. CHD’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, with the average surprise being 9.6%.
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