WD: Fiscal 3Q13 Financial Results

(in US$ million)	3Q12	3Q13	9 mo. 12	9 mo. 13
Revenues	3,035	3,764	7,724	11,623
*Growth*		24%		*50%*
Net income (loss)	483	391	867	1,245

Western Digital Corp. reported revenue of $3.8 billion, hard-drive shipments of 60.2 million and net income of $391 million, or $1.60 per share for its third fiscal quarter ended March 29, 2013.

On a non-GAAP basis, net income was $514 million or $2.10 per share.1 In the year-ago quarter, the company reported revenue of $3.0 billion, net income of $483 million, or $1.96 per share, and shipped 44.2 million hard drives. Non-GAAP net income in the year-ago quarter was $619 million, or $2.52 per share.2

The company generated $727 million in cash from operations during the March quarter, ending with total cash and cash equivalents of $4.1 billion. During the quarter, the company utilized $243 million to buy back 5.2 million shares of common stock. On February 14, the company declared a $0.25 per common share dividend, which was paid on Apr. 15.

"Strong execution by our HGST and WD subsidiaries drove outstanding results in the March quarter as we continue to capitalize on the secular growth of digital data," said Steve Milligan, president and CEO. "Overall industry demand was in line with our expectations. In our business, we saw strength in enterprise, stable performance in client and consumer electronics, and some anticipated seasonal softness in branded products."

Comments

WD shipped 60.2 million HDDs during the quarter, 2% more than during the former one, with sequential global revenue decreasing 2% at the same time.

The number of desktop, notebook and CE drives slowly increased. But the surprise is the fast progression of the enterprise units shipped (up 9% Q/Q). HGST did a good job and is probably taking market share to rival Seagate - wait for the publication of the financial results of Seagate for confirmation. But, on the contrary, WD's high-margin branded drives sold decreased 9% sequentially.

Steve Milligan, chairman, WD's CEO and president, said during the earnings call transcript: "Currently, we are seeing strong market response to several new products, including our new family of 5mm, 2.5-inch hard drives and solid state hybrid drives for ultraportable devices; our 7-disk, helium sealed drive platform aimed at delivering significant total cost of ownership benefits for hyperscale data centers and our expanding range of SSD offerings for the enterprise space."

The average capacity per drive shipped in the March quarter was 810GB, a 35% year-over-year increase.

WD expects a flat-to-slightly down total available market next quarter and its revenue in the range of $3.55 billion to $3.65 billion, "reflecting the current demand and pricing environment and the seasonal change in business mix."

WD sequential results

2FQ13

3FQ13

Growth

Notebook

21,300

21,547

Desktop

17,717

18,383

Consumer
Electronics

6,452

6,517