Summary
Western Digital Corporation (WDC) reported robust revenue growth in the first quarter of fiscal year 2012, with net revenue reaching $2.7 billion, a 12% increase year-over-year, driven by a 14% rise in hard drive unit shipments to 57.8 million units. The company also demonstrated improved profitability, with gross margin increasing to 20.1% from 18.2% in the prior year, primarily attributed to a more favorable product mix. Despite these positive operational results, investors should be aware of significant emerging challenges. The company is facing severe disruptions due to widespread flooding in Thailand, impacting a substantial portion of its manufacturing operations, including critical slider fabrication facilities. This event is expected to lead to significant supply constraints, negative gross margins, and substantial losses in the upcoming quarters. Additionally, the planned acquisition of Hitachi Global Storage Technologies (HGST) for approximately $4.2 billion is progressing, but remains subject to regulatory approvals and carries integration risks. The company's liquidity remains strong with $3.7 billion in cash and cash equivalents, although future cash flows are expected to be negatively impacted by the Thailand floods.
Financial Highlights
50 data points| Revenue | $2.69B |
| Cost of Revenue | $2.15B |
| Gross Profit | $541.00M |
| SG&A Expenses | $89.00M |
| Operating Expenses | $282.00M |
| Operating Income | $259.00M |
| Net Income | $239.00M |
| EPS (Basic) | $1.03 |
| EPS (Diluted) | $1.01 |
| Shares Outstanding (Basic) | 233.00M |
| Shares Outstanding (Diluted) | 237.00M |
Key Highlights
- 1Revenue increased 12% year-over-year to $2.7 billion, driven by a 14% increase in hard drive unit shipments.
- 2Gross margin improved to 20.1% from 18.2% in the prior year, attributed to an improved product mix.
- 3The company suspended production in its Thailand facilities due to severe flooding, which is expected to significantly impact future operations, supply, and profitability.
- 4The planned acquisition of Hitachi Global Storage Technologies (HGST) for $4.2 billion is ongoing, subject to regulatory approvals.
- 5Operating income increased to $259 million, but included $11 million in acquisition-related expenses and $7 million for litigation contingencies.
- 6Cash and cash equivalents remained strong at $3.7 billion, although future operating cash flow is expected to be negatively affected by the Thailand flooding.