The S&P 500 and Dow Jones enjoyed new all-time highs but not every stock joined. Western Digital (NASDAQ:WDC) sold off after its earnings report and CEO retirement news. eBay fared poorly, too. What happened?
Western Digital reported revenue falling in the first quarter, down 20%. Q2 outlook is within the $4.2 billion consensus estimates in the $4.1 billion - $4.3 billion range. But EPS of $0.45 - $0.65 is sharply below the consensus estimate of $0.75.
The CEO’s departure is a non-event and a positive direction for the company. The company needs cultural change to drive growth instead of flat profit growth. NAND and DRAM pricing is stable and HDD ASPs are steady. But the shift into NAND storage is in the early innings. WDC stock will recover as this unfolds.
eBay (NASDAQ:EBAY) may not be on any investor’s mind but its failure to break $40 cannot be ignored. The stock backed down to $35 after the Q3 report on Oct. 23. FY19 EPS of $2.75 - $2.78 is expected. But GMV fell 4.4% Y/Y in the quarter to $21.72 billion. Operating cash flow growth of $1.0 billion, a dividend ($115 million), and $1 billion in share buyback suggest the stock’s drop will end.
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