Western Digital reported fiscal fourth-quarter revenue of $3.747 billion on Wednesday, a 44% jump from a year earlier. But the company's shares fell nearly 12% in after-hours trading, as investors appeared to focus on details beyond the headline growth.
Revenue and earnings beat the prior year
The storage maker's Q4 period ended July 3. Non-GAAP diluted earnings per share came in at $3.56, while GAAP diluted EPS hit $8.21 — a wide gap that likely reflects one-time items. The company didn't break out the specific adjustments in its preliminary release.
Revenue of $3.747 billion topped the $2.6 billion reported in the same quarter last year. Western Digital has benefited from strong demand for its hard drives and flash memory products, particularly from data center customers.
Guidance for the current quarter
For fiscal Q1 2027, Western Digital guided revenue to $4.1 billion, plus or minus $100 million. That would represent year-over-year growth of roughly 42% to 49%. The midpoint of non-GAAP EPS guidance is approximately $4.00.
The guidance implies continued momentum, but the after-hours stock move suggests the market wanted more — either a higher forecast or more clarity on margins and earnings quality.
After-hours selloff
Shares dropped 11.79% to $457.96 in extended trading on August 5. The decline erased a portion of the stock's gains this year. Western Digital's stock had more than doubled over the past 12 months before the report.
The disparity between GAAP and non-GAAP earnings — $8.21 versus $3.56 — may have raised questions about the sustainability of reported profits. GAAP figures include items like stock-based compensation, restructuring charges, and amortization of acquired intangibles, which can swing results significantly.
Investors also may have been looking for stronger forward guidance given the company's recent run. The Q1 revenue midpoint of $4.1 billion, while up sharply year over year, fell within the range of analyst expectations rather than exceeding them.
Western Digital's fiscal first quarter ends in early October. The company will report results in late October, giving investors the next look at whether demand trends are holding up.
