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Western Digital
has seen business conditions get “incrementally more difficult” since the disk drive and flash memory company reported financial results in early August, CEO David Goeckeler said at the
Goldman Sachs
technology conference in San Francisco on Monday.
In reporting June quarter results, Western Digital (ticker: WDC) had projected September quarter revenue of $3.6 billion to $3.8 billion, and non-GAAP profit of 35 to 65 cents a share, which was well below previous expectations at the time. Street consensus estimates now call for $3.7 billion in revenue and adjusted profit of 49 cents.
While Goeckeler didn’t provide a specific revision to the forecast, he said that Western Digital has seen a sharp erosion in pricing for NAND flash memory based storage over the last month.
He added the pricing decline has been accompanied by declining NAND bit demand. Goeckeler also said the company is likely to push out the timing of its next NAND manufacturing facility.
He also said Western is starting to see “caution” from “hyperscale” cloud customers and that conditions in China continue to be challenging, with “no signs of a comeback.”
That caution is consistent with a recent warning from
Seagate
(STX) on softening cloud demand.
Western CFO Wissam Jabre said that the company had previously targeted positive free cash flow for the June 2023 fiscal year, but that it will be “more difficult to achieve,” with negative free cash flow for the year a possibility. He also said the company could be cash flow negative in the September quarter.
The executives didn’t offer any update on the company’s ongoing strategic review, which could include the separation of Western’s disk drive and flash memory segments.
Western Digital shares on Monday were down 0.5%, to $43.57. The stock is down 34% for the year.
Write to Eric J. Savitz at [email protected]
Source: https://www.barrons.com/articles/western-digital-nand-decline-ceo-51663005170?siteid=yhoof2&yptr=yahoo