Invesitng.com -- Shares in Western Digital (NASDAQ:WDC) surged by more than 11% in premarket US trading on Friday after the data storage group reported better-than-expected quarterly earnings powered by a spike in cloud revenue.
For the three months ended Sept. 30, Western Digital posted adjusted earnings of $1.78 per diluted share on revenue of $1.10 billion. Analysts polled by Investing.com had anticipated per-share income of $1.71 on revenue of $1.11 billion.
Cloud revenue, which represents 54% of overall sales, was up 153% in the third quarter compared to a year earlier, driven by "higher nearline shipments" in hard disk drives and enterprise solid-state drive bit shipments to data center customers, the company said. The strength in the cloud unit helped offset weaker flash shipments that were linked in part to "softer consumer demand," Western Digital added.
A hard disk drive (HDD) is a type of data storage device that uses magnetic disks, while solid-state drives (SSDs) store data in flash memory. HDDs tend to be cheaper and can offer more storage space, although SSDs can be faster and more durable.
"[W]e remain constructive on [the] underlying profitability of business with HDD demand visibility improving from its largest customers [...] coupled with shift to higher-capacity 32 [terabyte] drives," analysts at Citi said in a note.
Looking ahead to its fiscal second quarter, California-based Western Digital said it expects revenue to be in the range of $4.20 billion to $4.40 billion with adjusted profit per share of $1.75 to $2.05. Wall Street estimates had forecast per-share earnings of $1.93 and revenue of $4.32 billion.
In a statement, Chief Executive David Goeckeler said the firm is "well-positioned" to capitalize on an uptick in demand for data storage during an ongoing boom in enthusiasm over artificial intelligence.