Western Digital said on Thursday it expected revenue to improve in the second half and would cut costs, after posting lower-than-expected quarterly results due to waning demand for its data storage devices used in smartphones.
The company’s shares reversed course following the comments on a post-earnings call to trade 8 percent higher in extended trading. They fell as much as 5 percent earlier.
Chief Executive Officer Stephen Milligan said on the call that the company expected revenues to improve in the latter part of 2019 as cloud computing customers return to more normal buying patterns and demand from its other businesses improve.
“WDC’s expectation for the second half have raised investor hopes,” said Kevin Cassidy, an analyst with Stifel Nicolaus and Co.
Western Digital is targeting $800 million in annualized reductions in non-GAAP cost and expenses, Milligan said on the post-earnings call, adding that the company is accelerating the closure of a plant.
“NAND flash price is close to the bottom in 1Q19 or 1H19. I expect cost reductions to outpace price decline in 2H19,” said Summit Insight Group analyst Kinngai Chan.