Western Digital stock drops 8.21% despite higher Q2 outlook

Western Digital reported strong fiscal first-quarter results for the period ended October 2, 2026, and issued a higher outlook for the following quarter. The company's Western Digital earnings release said demand, pricing and execution supported the improvement.

Strong quarter, higher targets

Revenue rose 55 percent year over year to 4.381 billion US dollars and increased 17 percent from the prior quarter. GAAP operating income reached 2.046 billion US dollars, while diluted GAAP earnings per share rose 51 percent year over year to 4.63 US dollars.

On a non-GAAP basis, gross margin expanded to 58.1 percent from 43.9 percent a year earlier. Operating margin rose to 49.1 percent from 30.4 percent, and diluted earnings per share climbed 161 percent to 4.64 US dollars. Operating cash flow reached 1.604 billion US dollars, with free cash flow of 1.377 billion US dollars.

Management raises the bar

For fiscal second-quarter 2027, Western Digital expects revenue of 5.0 billion to 5.2 billion US dollars, with a midpoint of 5.1 billion US dollars. That outlook implies year-over-year growth of roughly 69 percent. Non-GAAP gross margin is expected at 60 percent to 61 percent, while diluted earnings per share are guided to 5.80 US dollars, plus or minus 0.20 US dollars.

Chief Financial Officer Kris Sennesael linked the outlook to robust exabyte growth and improved pricing. The board also raised the quarterly cash dividend by 17 percent to 0.175 US dollars per share. The dividend is scheduled for payment on December 17, 2026, to shareholders of record on December 4.

Stock remains below Thursday's close

Western Digital stock traded at 329.73 euros on Lang & Schwarz at 5:00:51 p.m. CET on Friday, October 30, 2026, 4.06 percent below the Xetra close of Thursday, October 29. The quote was 8.21 percent below the 359.23 euros recorded in the latest relevant own report at 5:03 p.m. CET on October 29.

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