Summary
Western Digital Corporation (WDC) reported a significant increase in revenue and profitability for the first quarter of fiscal year 2013, driven primarily by the successful integration of the HGST acquisition and a substantial rise in the average selling price (ASP) of its hard drives. Net revenue grew by 50% year-over-year to $4.0 billion, with gross margin improving to 29.6% from 20.1% in the prior year period, reflecting higher ASPs, partly due to the lingering effects of the Thailand flooding on supply. The company also generated strong operating cash flow of $936 million. Key strategic developments include the ongoing integration of HGST, which is proceeding under certain regulatory conditions requiring HGST to remain an independent competitor. While this limits immediate synergy realization, management is focused on long-term integration benefits. The company also announced a new quarterly cash dividend policy and continued its share repurchase program, indicating a commitment to returning capital to shareholders. Despite a challenging demand environment, evidenced by a sequential decline in industry shipments, WDC's diversified revenue streams and strategic moves position it for continued performance.
Financial Highlights
54 data points| Revenue | $4.04B |
| Cost of Revenue | $2.84B |
| Gross Profit | $1.19B |
| SG&A Expenses | $179.00M |
| Operating Expenses | $601.00M |
| Operating Income | $592.00M |
| Net Income | $519.00M |
| EPS (Basic) | $2.11 |
| EPS (Diluted) | $2.06 |
| Shares Outstanding (Basic) | 246.00M |
| Shares Outstanding (Diluted) | 252.00M |
Key Highlights
- 1Revenue increased 50% year-over-year to $4.0 billion, largely due to the HGST acquisition and higher average selling prices (ASPs) for hard drives.
- 2Gross margin improved significantly to 29.6% from 20.1% in the prior year, driven by higher ASPs.
- 3Operating income more than doubled to $592 million, despite $26 million in employee termination benefits.
- 4Generated strong operating cash flow of $936 million, demonstrating effective cash generation.
- 5Ended the quarter with a healthy cash and cash equivalents balance of $3.5 billion.
- 6Announced a new quarterly cash dividend policy and continued share repurchases, signaling confidence and commitment to shareholder returns.
- 7Unit shipments increased 8% year-over-year to 62.5 million units, indicating continued demand for WDC's core products.