WD Announces Q1 Revenue of $1.8 Billion and GAAP Net Income of $69 Million, or $.31 Per Share
November 28, 2007
Non-GAAP Net Income of $182 Million, or $.81 Per Share; HDD Revenue Grows 37 Percent, Units 29 Percent Year-Over-Year
Western Digital Corp. (NYSE: WDC) recently reported revenue of $1.766 billion, comprised of $1.726 billion of hard drive revenue and $40 million revenue from media and substrate sales. Hard drive revenue grew by 37 percent over the prior-year comparative period on shipments of 29.4 million units, an increase of 29 percent in unit volume.
GAAP net income for the quarter was $69 million, or $.31 per share. This includes net non-recurring tax charges of $60 million related to WD's ongoing hard drive operations and the results of the company's newly acquired media operations from Sept. 5 through Sept. 28, 2007, including acquisition-related, in-process research and development charges of $49 million.
Excluding the non-recurring tax charges, non-GAAP consolidated net income was $129 million, or $.58 per share. Excluding the tax charges and the impact of the Komag acquisition, non-GAAP HDD revenue was $1.726 billion, unit shipments were 29.4 million and non-GAAP HDD net income was $182 million, or $.81 per share. A year ago, the company reported first quarter revenue of $1.264 billion, unit shipments of 22.7 million, and net income of $103 million, or $.46 per share.
In Q1, while achieving strong quarter-over-quarter growth in the high-volume desktop market, the company for the first time derived more than half its quarterly hard drive revenue from non-desktop PC applications. Fifty-three percent of hard drive revenue was from these applications, including notebook PCs, consumer electronics, enterprise applications and branded product retail sales. This compares with a mix in the year-ago quarter of 35 percent non-desktop PC revenue.
The company's unit shipments for the first quarter included approximately 5.9 million 2.5-inch hard drives for mobile applications and approximately 3.7 million 3.5-inch hard drives for use in digital video recorders. Branded products accounted for 18 percent of Q1 revenue, continuing to demonstrate the value of WD's global brand leadership.
The company generated $219 million in cash from operations during the September quarter, ending with total cash and short-term investments of $851 million. The company borrowed $750 million on its $1.25 billion bridge financing facility to help fund the Komag acquisition.
"Our first quarter results reflect the WD team's strong execution in a strong market for hard drives across all applications, regions and channels," said John Coyne, WD's president and chief executive officer. "We continue to reap the benefits of our investments and deployment of leading technologies over the last several years, enabling us to address customer demand for mainstream and higher capacity hard drives in consumer and commercial applications."
Specifically, Coyne noted growing shipments of the company's 250 GB WD Scorpio® 2.5-inch and high capacity 3.5-inch hard drives-all based on newer technologies including the company's PMR (perpendicular magnetic recording) heads.
