WD’Ã announces Q2 revenue of $2.2 billion and Year-over-year EPS increase of 137 percent at $1.35

Published February 3rd, 2008 - 08:08 GMT

Western Digital Corp. (NYSE: WDC) today reported revenue of $2.2 billion, comprised of $2.084 billion of hard drive revenue and $120 million of revenue from media and substrate sales for the second fiscal quarter ending Dec. 28, 2007. Hard drive revenue grew by 46 percent over the prior-year comparative period on shipments of approximately 34.2 million units, a year-over-year increase of 40 percent in unit volume. Net income was $305 million, or $1.35 per share.
EPS grew 137 percent over the prior year. In the year-ago quarter, the company reported revenue of $1.4 billion, unit shipments of 24.5 million and net income of $128 million, or $.57 per share.
Fifty-four percent of Q2 hard drive revenue was derived from non-desktop PC sources, including hard drives for notebook PCs, consumer electronics and enterprise applications, and WD branded product retail sales. This compares with a mix in the year-ago quarter of 42 percent.
The company shipped 8.7 million 2.5-inch mobile drives and 4.1 million 3.5-inch units for the PVR/DVR market, compared with 2.7 million units in each of these markets a year ago. Branded products accounted for 18 percent of hard drive revenue, continuing to demonstrate the value of WD’s global brand. 
From a balance sheet perspective, the company generated $519 million in cash from operations during the December quarter, ending with total cash, cash equivalents and short-term investments of $967 million. During the quarter, the company used $240 million of cash generated from operations to pay down debt acquired in the Komag acquisition.
“We are very pleased with our December quarter results and continue to be excited about our prospects in addressing the surging global demand for high-capacity storage in multiple consumer and business markets,†said John Coyne, WD president and chief executive officer.
 â€œOur performance continues to reflect crisp and timely execution by the WD team, strong demand for hard drives and a more rational competitive pricing environment. Our operational flexibility and our technology leadership in 2.5-inch mobile hard drives enabled us to quickly react to a number of attractive market and product mix opportunities throughout the December quarter.â€
For the six-months ended Dec. 28, 2007, Western Digital reported revenues of $4.0 billion and hard drive shipments of 63.6 million, for increases of 48 percent and 35 percent, respectively, over the comparable prior-year period revenue of $2.7 billion and unit shipments of 47.2 million. GAAP net income for the six-months was $374 million, or $1.66 per share. Excluding $49 million of non-recurring charges for acquired in-process research and development and $60 million of non-recurring tax charges in the first quarter, non-GAAP net income for the current six-month period was $483 million, or $2.15 per share. These current-period non-GAAP earnings reflect an approximately 110 percent increase over the prior-year six-month net income and earnings per share amounts of $231 million and $1.02, respectively. There were no non-recurring items in the prior-year six-month period and therefore there is no non-GAAP measure for the prior year.


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