Summary
Western Digital Corporation (WDC) filed its 10-Q for the period ending December 31, 2009, on January 28, 2010. The report highlights the company's ongoing management of foreign currency risks through hedging strategies, primarily focusing on the Thai Baht, Malaysian Ringgit, Euro, and British Pound Sterling. The company also disclosed that its disclosure controls and procedures were deemed effective as of the end of the reporting period. A significant portion of the filing is dedicated to detailing risk factors, with many remaining unchanged from the previous fiscal year's annual report, indicating a stable but challenging operational environment. Investors should note that demand for WDC's products had improved from the lows of fiscal 2009, leading to increased capital expenditures. However, the company cautioned that a significant slowdown in industry recovery could necessitate cost-structure adjustments, potentially leading to impairment charges. Key risks discussed include dependence on a limited number of suppliers, concentration of manufacturing in a few facilities, the impact of global economic conditions on demand and customer creditworthiness, and intense competition within the hard drive industry, including the rise of alternative storage technologies like solid-state drives.
Financial Highlights
47 data points| Revenue | $2.64B |
| Cost of Revenue | $1.98B |
| Gross Profit | $665.00M |
| Operating Expenses | $224.00M |
| Operating Income | $441.00M |
| Net Income | $400.00M |
| EPS (Basic) | $1.75 |
| EPS (Diluted) | $1.71 |
| Shares Outstanding (Basic) | 229.00M |
| Shares Outstanding (Diluted) | 234.00M |
Key Highlights
- 1Western Digital Corp. manages foreign currency risk through hedging with contracts for Thai Baht, Malaysian Ringgit, Euro, and British Pound Sterling, with contracts not exceeding 12 months in maturity.
- 2The company's disclosure controls and procedures were evaluated as effective by management, including the CEO and CFO, as of January 1, 2010.
- 3Demand for WDC's products has improved from fiscal 2009 lows, prompting increased capital expenditures and capacity.
- 4A significant slowdown in industry recovery could force restructuring and potential impairment charges.
- 5The company remains heavily reliant on a limited number of qualified suppliers for components and manufacturing equipment.
- 6Manufacturing operations are concentrated in a few large facilities, increasing risk from potential disruptions.
- 7Intense competition, price volatility, and the emergence of alternative storage technologies (like solid-state drives) are significant ongoing risks.