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Western Digital cuts Q1 outlook, boost share buyback

Hard drive maker Western Digital Corp. (NYSE:WDC) late Thursday cut its revenue outlook for the fiscal first quarter, at the same time starting a quarterly dividend and boosting its share buyback authorization by $1.5 billion.

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Hard drive maker Western Digital Corp. (NYSE:WDC) late Thursday cut its revenue outlook for the fiscal first quarter, at the same time starting a quarterly dividend and boosting its share buyback authorization by $1.5 billion.

The world's largest hard drive maker has seen muted demand for its products. The company, which competes against Seagate Technology (NASDAQ:STX), said it expects industry demand of 140 million hard drives in the September quarter, down from its earlier forecast of 157 million units.

Western Digital said its board of directors has approved an additional $1.5 billion share buyback and it will start a quarterly dividend of 25 cents per share payable on October 15.

Western Digital expects revenue of $3.9 billion to $4.0 billion for its first quarter ending September 28, down from its prior forecast of $4.2 billion to $4.3 billion.

Analysts on average were expecting revenue of $4.29 billion, according to Thomson Reuters. The company expects adjusted gross margin of about 30 percent in its first quarter.

The company has benefited recently from its $3.4 billion acquisition of Hitachi's hard drive operations. It has also seen a boost from its recovery from severe flooding that occurred in Thailand late last year.

In July, Western Digital posted third-quarter earnings of $745 million, or $2.87 per share, compared to a $158 million profit, or 67 cents per share, in the prior year period.

Removing acquisition and restructuring-related costs, the company earned $3.35 a share, compared to 81 cent per share in profit a year earlier.

Sales, for the quarter that ended June 29, came in at $4.8 billion, up from the $2.4 billion recorded a year prior.

Analysts polled by Bloomberg expected a per-share profit of $2.49, on $4.2 billion in revenue for the latest quarter.

Quick facts: Western Digital Corp

Price: 58.18 USD

NYSE:WDC
Market: NYSE
Market Cap: $17.29 billion
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