WD: Fiscal 3Q16 Financial Results

(in $ million)	3Q15	3Q16	9 mo. 16	9 mo. 16
Revenues	3,550	2,822	11,381	9,499
*Growth*		-20%		*-16%*
Net income (loss)	384	74	1,245	608

Western Digital Corp. reported revenue of $2.8 billion and net income of $74 million, or $0.32 per share, for its third fiscal quarter ended Apr. 1, 2016.

On a non-GAAP basis, net income was $283 million, or $1.21 per share.

In the year-ago quarter, the company reported revenue of $3.5 billion and net income of $384 million, or $1.63 per share. Non-GAAP net income in the year-ago quarter was $441 million, or $1.87 per share.

The company generated $485 million in cash from operations during the third fiscal quarter, ending with total cash and cash equivalents of $5.9 billion.

On Feb. 10, 2016, the company declared a cash dividend of $0.50 per share of its common stock, which was paid on Apr. 15, 2016.

“We continue to manage our business effectively in a dynamic storage demand environment,” said Steve Milligan, CEO. “Computer usage continues to shift from PCs to mobile devices and enterprise workloads are moving increasingly to cloud-based architectures. Our strategy to become a broad-based provider of media-agnostic storage solutions anticipates these and other trends. After we complete the acquisition of SanDisk, we will be better positioned to address and capitalize on these changes and opportunities, with the storage industry’s broadest set of products, a rich technology portfolio, and an experienced team in both rotating magnetic and non-volatile memory.”

The company indicated that it continues to expect to complete its planned acquisition of SanDisk in the June quarter.

Comments

That's really bad quarter for WD as the global HDD market is suffering from much lower demand in the three-month of the calendar year.

As it's the same for its competitors, the WD's global market share Q/Q remains exactly the same: 43.2%.

For HDD shipped, all the figures are decreasing sequentially but one, the average capacity per HDD from 1.390TB to 1,443TB. Even the exabytes shipped is down from 691EB to 622EB.

More than that, CEO Steve Milligan anticipates that hard drive demand in the June quarter will be slightly down from the March quarter, given continued softer PC demand and weaker than expected demand in performance enterprise. WDC expects revenue in the range of only $2.6 billion to $2.7 billion for next quarter..

Volume and HDD Share

With the

Concerning the integration of Hitachi GST, Western Digital expects expect to achieve total savings of $800 million on an annualized run rate basis by the end of 2017 versus the $650 million estimated previously.

Contrary to Seagate, WD will come back to growth in the future with the vital acquisition of SanDisk that Seagate refuses as being too expansive.

Its main competitor will probably records the same bad results in revenue and HDDs shipped, but as usual with lower figures.

WD's HDDs
(units in million)

Enterprise

Desktop

Notebook

Branded

Total HDDs

HDD share

Exabyte
Shipped

Average
GB/drive

ASP

4Q13

7.9

16.2

24.0

6.5

5.3

59.9

44.9%

47.7

797

$60

1Q14

7.8

17.3

22.9

8.5

6.1

62.6

44.7%

50.8

811

$58

2Q14

7.8

16.8

22.7

8.8

7.0

63.1

44.4%

55.1

874

$60

3Q14

7.1

16.6

21.8

8.6

6.3

60.4

43.8%

53.6

888

$58

4Q14

7.1

16.2

22.9

10.9

6.0

63.1

45.7%

55.2

875

$56

1Q15

7.8

16.3

23.4

10.5

6.8

64.7

44.0%

64.9

1,002

$58

2Q15

8.0

15.4

21.2

9.3

7.2

61.0

43.4%

66.4

1,087

$60

3Q15

7.5

13.5

18.8

8.6

6.1

54.5

43.6%

61.3

1,123

$61

4Q15

7.2

11.6

15.5

9.1

5.2

48.5

43.7%

56.2

1,159

$60

1Q16

7.2

11.7

15.8

11.5

5.6

51.7

43.6%

63.5

1,228

$60

2Q16

7.0

12.5

15.3

8.5

6.4

49.7

43.2%

69.1

1,390

$61

3Q16

6.4

10.7

13.6

7.3

5.2

43.1

43.2%

62.2

1,443

$60