WDC is expected to report second quarter earnings tonight after the close. There is a conference call scheduled for 17:00 (the company typically guides on the conference call).
Second Quarter Capital IQ consensus calls for EPS of $2.12 vs $1.60 last year on revenue of $4.764 bln (+43% YoY).
- The current consensus is within the company's guidance range of $2.10-2.15 & ~$4.75 bln.
- The company is expected to guide for the third quarter where consensus stands at $4.372 bln.
- Seagate (STX) already reported its results and reported a beat on EPS and revenues. Seagate shares are higher by 21% and WDC is trading higher in sympathy ahead of its earnings.
- Last quarter, the company reported non-GAAP gross margins of 34% versus 28.9% last year.
Based on WDC options, the current implied volatility stands at ~ 41%, which is 69% higher than historical volatility (over the past 30 days).
Based on the WDC Jan27 $80 straddle, the options market is currently pricing in a move of ~6% in either direction by weekly expiration (Friday)