WD: Fiscal 1Q09 Financial Results

Western Digital Corp. reported revenue of $2.1 billion, on shipments of approximately 39.4 million units, with net income of $211 million, or $0.93 per share, for its fiscal first quarter ending September 26, 2008. The September quarter results represented strong year-over-year performance, including growth in revenue and unit shipments of 19 percent and 34 percent, respectively. In the year-ago quarter, the company reported revenue of $1.8 billion, unit shipments of 29.4 million, and net income of $69 million, or $0.31 per share. Net income in the year-ago period was reduced by charges of $60 million for taxes related to the license of intellectual property to subsidiaries and $49 million for in-process research and development related to the acquisition of Komag.

The company shipped 14.6 million 2.5-inch drives for notebook PCs and external storage, representing a sequential quarterly increase of 25 percent, and 3.9 million 3.5-inch units for the PVR/DVR market in the first quarter, a 5 percent sequential decrease. On a year-over-year basis, these shipments increased by 147 percent and 5 percent, respectively. Branded product revenue of $383 million was essentially flat with the June quarter and up 19 percent year-over-year. The company also continued to grow its shipments of enterprise-class Serial ATA drives and hard drives featuring its unique GreenPower technology into the desktop, enterprise and consumer electronics markets.

The company generated $301 million in cash from operations during the September quarter, ending with total cash and cash equivalents of $1.2 billion.

John Coyne, WD president and chief executive officer, stated: "By presenting customers with a compelling product set, being selective in market and product mix, being responsive with availability and maintaining our focus on quality, efficiency, cost and execution, we have again demonstrated the strength of the WD business model and the WD team. This proven and disciplined approach has repeatedly produced strong, profitable growth."

Reflecting its ongoing targeted R&D investment over the last several years, the company commenced shipment of several new products during the first quarter, including:

• The WD Scorpio Blue 2.5-inch hard drive family with capacities up to 500 GB, extending WD’s industry leadership in areal density for standard form factor notebook hard drives;
• The 500 GB 2.5-inch My Passport portable USB drives for easy to use, portable storage of music, videos, photos and data files;
• The second-generation WD Caviar(R) Green(TM) hard drives with significantly improved power, efficiency and performance;
• The WD ShareSpace high-speed network storage system that provides up to 4 TB of cost-effective, centralized storage for small office and home networks;
• An expanded enterprise product line with the addition of high-capacity, high-performance WD RE3 750 GB and 1 TB 3.5-inch SATA hard drives; and
• The new backplane-compatible WD VelociRaptor hard drive, in both 3.5-inch and 2.5-inch form factors, the latest generation of the company’s 10,000 RPM SATA WD VelociRaptor series.