Summary
Western Digital Corporation (WDC) reported a net loss of $754 million for the fiscal year ended June 28, 2019, a significant downturn from the $675 million net income in the prior year. This reversal was primarily driven by a substantial decrease in gross profit, which fell by 51% compared to fiscal year 2018. The decline in profitability was attributed to lower average selling prices (ASPs) for flash-based products due to oversupply and intense competition, coupled with significant charges. These charges included $264 million for flash manufacturing underutilization and $145 million related to a power outage incident. Despite these challenges, the company emphasized its strong position in the data storage market, offering a broad portfolio of HDD and flash-based solutions across client devices, data centers, and client solutions segments. The company's strategy focuses on technology leadership, a broad product portfolio, and operational excellence. However, investors should note the significant debt level of $10.69 billion, which could impact future financial flexibility and operations.
Financial Highlights
32 data points| Revenue | $16.57B |
| Cost of Revenue | $12.82B |
| Gross Profit | $3.75B |
| SG&A Expenses | $1.32B |
| Operating Expenses | $3.67B |
| Operating Income | $87.00M |
| Interest Expense | $469.00M |
| Net Income | -$754.00M |
| EPS (Basic) | $-2.58 |
| EPS (Diluted) | $-2.58 |
| Shares Outstanding (Basic) | 292.00M |
| Shares Outstanding (Diluted) | 292.00M |
Key Highlights
- 1Net loss of $754 million for fiscal year 2019, a stark contrast to a $675 million net income in fiscal year 2018.
- 2Gross profit declined significantly by 51% year-over-year, largely due to lower ASPs in flash products and oversupply conditions.
- 3The company incurred substantial charges, including $264 million for flash manufacturing underutilization and $145 million due to a power outage incident impacting flash wafer production.
- 4Total debt stood at $10.69 billion as of June 28, 2019, raising concerns about financial leverage.
- 5Revenue decreased by 19.8% to $16.57 billion in fiscal year 2019, impacted by lower sales across all end markets.
- 6Western Digital highlighted its dual technology expertise in both Hard Disk Drives (HDDs) and flash-based storage, positioning it as a comprehensive data storage solutions provider.
- 7The company continues its strategic partnership with Toshiba Memory Corporation (TMC) for flash-based memory wafer manufacturing.