Western Digital announced that it expects fiscal first-quarter earnings of 34 cents to 38 cents a share. Excluding charges, earnings are expected to come in at 61 cents to 65 cents per share. Sales for the quarter are expected to come in between $1.63 billion to $1.68 billion. Analysts are currently forecasting a profit of 48 cents per share and revenue of $1.49 billion.
In addition, WDC predicts the Komag transaction will add to earnings during the fourth quarter.
The equity has leapt more than 4% higher this morning on the positive news. The shares have bounced off support at their 10-week moving average, but continue to encounter resistance in the 24-25 region. This area has capped the stock since January 2006.
Options speculators are betting that the stock is going to run out of steam soon. Schaeffer's put/call open interest ratio rests at 1.07, as put open interest outweighs call open interest among near-term options. This reading is higher than all but 6% of those taken during the past 52 weeks. A shift in sentiment to the bulls' camp could add some buying strength to the equity.