Summary
Western Digital Corporation (WDC) reported improved financial results for the quarter ended December 28, 2001, compared to the same period in the prior year. Net income rose to $12.6 million, or $0.07 per diluted share, from $3.6 million, or $0.02 per diluted share, in the prior year's quarter. This improvement was driven by a 2% increase in revenues to $574.7 million, supported by a 25% rise in unit shipments, though partially offset by an 18% decrease in average selling prices (ASPs). The company also demonstrated improved cost management, with total costs and expenses as a percentage of revenue decreasing to 98.3% from 99.6%. The six-month period also showed a significant turnaround, with net income of $33.1 million compared to a net loss of $31.9 million in the prior year. Revenues for the six months increased by 3% to $1.016 billion. The company successfully managed its new business ventures, reducing operating losses in this segment, and also benefited from a substantial gain on the disposal of discontinued operations (Connex and SANavigator businesses) which contributed significantly to the six-month profitability. The company ended the period with a healthy cash position and believes its current liquidity is sufficient for its needs.
Key Highlights
- 1Net income for the three months ended December 28, 2001, was $12.6 million, a substantial increase from $3.6 million in the prior year's quarter.
- 2Diluted earnings per share (EPS) for the quarter improved to $0.07 from $0.02 in the prior year.
- 3Total revenues for the quarter increased by 2% to $574.7 million, driven by a 25% increase in unit shipments.
- 4The company achieved a significant turnaround in its six-month results, reporting net income of $33.1 million compared to a net loss of $31.9 million in the prior year.
- 5Operating losses from new business ventures decreased, indicating successful expense reduction efforts in these areas.
- 6A gain of $24.5 million was recognized from the disposal of discontinued operations (Connex and SANavigator businesses) during the six-month period.
- 7Cash and cash equivalents increased to $193.3 million at the end of the period, and the company stated its belief that current cash and credit facilities are sufficient for future needs.