Summary
Western Digital Corporation (WDC) reported its first quarter fiscal year 2011 results, ending October 1, 2010. The company saw a year-over-year increase in net revenue of 9% to $2.4 billion, driven by a 15% rise in hard drive unit shipments to 50.7 million units. This growth was primarily fueled by non-desktop markets, which accounted for 64% of hard drive revenue, indicating a strategic shift towards more diverse applications. Despite the top-line growth, profitability was impacted by a significant decrease in gross margin to 18.2% from 23.3% in the prior year, attributed to an aggressive pricing environment throughout the quarter. Operating income also saw a substantial decline. However, the company maintained a strong liquidity position, ending the quarter with $2.9 billion in cash and cash equivalents, and generated $390 million in cash flow from operations, demonstrating its ability to manage its finances effectively amidst competitive market conditions.
Financial Highlights
49 data points| Revenue | $2.48B |
| Cost of Revenue | $2.00B |
| Gross Profit | $475.00M |
| SG&A Expenses | $66.00M |
| Operating Expenses | $235.00M |
| Operating Income | $240.00M |
| Net Income | $225.00M |
| EPS (Basic) | $0.98 |
| EPS (Diluted) | $0.96 |
| Shares Outstanding (Basic) | 230.00M |
| Shares Outstanding (Diluted) | 235.00M |
Key Highlights
- 1Net revenue increased by 9% year-over-year to $2.4 billion, driven by higher unit shipments.
- 2Hard drive unit shipments grew by 15% year-over-year to 50.7 million units.
- 3Non-desktop markets (notebooks, CE, enterprise, WD-branded products) represented 64% of hard drive revenue, highlighting diversification.
- 4Gross margin decreased significantly to 18.2% from 23.3% in the prior year, largely due to competitive pricing pressures.
- 5Operating income decreased by $108 million compared to the prior-year period.
- 6The company ended the quarter with a strong cash position of $2.9 billion.
- 7Generated $390 million in cash flow from operations during the quarter.