WD: Fiscal 1Q15 Financial Results

(in $ million)	1Q14	1Q15
Revenue	3,804	3,943
*Growth*		4%
Net income (loss)	495	423

Western Digital Corp. reported revenue of $3.9 billion and net income of $423 million, or $1.76 per share, for its first fiscal quarter ended Oct. 3, 2014.

On a non-GAAP basis, net income was $504 million or $2.10 per share.

In the year-ago quarter, the company reported revenue of $3.8 billion and net income of $495 million, or $2.05 per share. Non-GAAP net income in the year-ago quarter was $514 million, or $2.12 per share.

The company generated $827 million in cash from operations during the September quarter, ending with total cash and cash equivalents of $5.2 billion.

During the September quarter, the company utilized $223 million to repurchase 2.2 million shares of common stock. On Aug. 5, the company declared a $0.40 per common-share dividend, which was paid on Oct. 15.

“We achieved solid revenue, gross margins and EPS in the September quarter, along with continued strong cash flow generation, as the company continued its crisp execution and consistent financial performance,” said Steve Milligan, president and CEO. “We were pleased to see strength and momentum in our capacity enterprise HDD and flash platform solutions businesses. Our client and branded products businesses were seasonally strong as expected and our performance enterprise business was steady. Overall, we believe industry dynamics are stable in terms of supply and demand and inventory levels.“

Comments

Seagate and WD are growing or decreasing quarterly depending directly on the demand. The market was down in the three-month period ending in June 2014 and up for their most recent quarter.

Consequently, like for Seagate, about all the figures of WD for 1FQ15 are growing.

But the market share of Seagate is growing sequentially in number of hard disk drives shipped, from 38.0% to 40.0%, compared to 45.7% and 44.0% respectively for its rival continuing to remain the number one manufacturer of HDDs.

Revenue for WD's flash business reached $156 million for the quarter including enterprise SSDs.

President and CEO Steve Milligan, commented: "The industry demand outlook for the December quarter reflects a modest sequential decline with moderation in client and CE partially offset by continued strength in capacity enterprise, and branded and steady demand in performance enterprise. We believe industry supply and demand and associated inventory levels remain balanced. Looking at our business for the December quarter, we see the same trends. Moderation in client and CE, strong momentum in branded in capacity enterprise as well as in our flash related business, and continued steadiness in performance enterprise."

Olivier Leonetti, new CFO, added: "’I shall now provide our guidance for the December quarter. We expect revenue to be in a range of $3.75 billion to $3.85 billion. Gross margin to be flat with the December quarter level of 30%, excluding the amortization of intangibles."

To read the earnings call transcript

WD's HDD units in million	Enterprise	Desktop	Notebook	CE	Branded	Exabyte Shipped	Average GB/drive	ASP
4Q12	7.9	21.2	32.8	4.2	5.0	47.4	668	$65
1Q13	6.0	16.8	25.9	8.0	5.8	44.3	708	$62
2Q13	6.6	17.7	21.3	6.5	7.1	47.6	804	$62
3Q13	7.2	18.4	21.5	6.5	6.5	48.4	807	$61
4Q13	7.9	16.2	24.0	6.5	5.3	47.7	797	$60
1Q14	7.8	17.3	22.9	8.5	6.1	50.8	811	$58
2Q14	7.8	16.8	22.7	8.8	7.0	55.1	874	$60
3Q14	7.1	16.6	21.8	8.6	6.3	53.6	888	$58
4Q14	7.1	16.2	22.9	10.9	6.0	55.2	875	$56
1Q15	7.8	16.3	23.4	10.5	6.8	64.9	1,002	$58

Seagate vs.WD for 1FQ15

	Seagate	WD	% in favor of WD
Revenue*	3,785	3,943	4%
Net income*	381	423	*11%*
Notebook	20.2	23.4	16%
Desktop	18.7	16.3	-13%
Branded	5.7	6.8	19%
CE	6.0	10.5	75%
Enterprise	8.8	7.8	-11%
Total HDDs	59.5	64.8	9%
Market share	40.0%	44.0%	10%
Average GB/drive	1,007	1,002	-1%
EB shipped	50.9	64.9	11%
ASP	$60	$58	-7%

* in $ million