Western Digital Corp. (NASDAQ:WDC) shares dropped more than 4% in pre-market today after the company reported fourth-quarter revenue that fell short of Wall Street expectations and provided a cautious outlook for the first quarter of 2025.

In the fourth quarter, Western Digital posted earnings of $1.44 per share, surpassing the Street estimate of $1.16. Despite this, revenue for the quarter was $3.76 billion, slightly below the analyst forecast of $3.74 billion. This revenue figure, however, represents a substantial 41% increase from $2.672 billion in the same period last year, showcasing significant year-over-year growth.

Looking ahead, Western Digital's guidance for the first quarter of 2025 did not meet analyst expectations. The company projected earnings between $1.55 and $1.85 per share, with the midpoint falling short of the Street estimate of $1.76. Additionally, the company forecasted revenue between $4 billion and $4.2 billion, below the analyst consensus of $4.23 billion.

CEO David Goeckeler highlighted the company's progress and strategic positioning amidst market recovery. He noted the structural improvements in profitability for both Flash and HDD segments, and emphasized the transformative impact of the AI Data Cycle, which is expected to drive increased demand for storage solutions.