Summary
Western Digital Corporation's (WDC) 10-Q filing for the quarter ended September 26, 2013, reveals a company navigating a dynamic storage market. Revenue saw a 6% year-over-year decrease to $3.8 billion, primarily due to a 6% decline in average selling prices (ASPs) driven by competitive pressures and a shifting product mix. Despite the revenue dip, the company maintained a solid gross margin of 28.6%, though down from 29.6% in the prior year, attributed to the lower ASPs. Operating expenses were managed effectively, with a notable 26% reduction in SG&A, partly due to an insurance recovery. Net income for the quarter was $495 million, or $2.05 per diluted share, a slight decrease from $519 million ($2.06 per share) in the same period last year. Financially, WDC ended the quarter with a strong cash position of $4.9 billion, bolstered by $680 million in cash flow from operations. The company completed two strategic acquisitions during the quarter: sTec, a provider of enterprise solid-state drives, and VeloBit, a software optimization company, to enhance its HGST subsidiary's capabilities. These acquisitions, along with ongoing R&D investments, signal a focus on expanding into higher-growth areas like enterprise SSDs, where revenue grew significantly. The company also continued its capital allocation strategy, repurchasing $150 million in stock and initiating a quarterly dividend of $0.25 per share.
Financial Highlights
53 data points| Revenue | $3.80B |
| Cost of Revenue | $2.71B |
| Gross Profit | $1.10B |
| SG&A Expenses | $132.00M |
| Operating Expenses | $557.00M |
| Operating Income | $542.00M |
| Net Income | $495.00M |
| EPS (Basic) | $2.10 |
| EPS (Diluted) | $2.05 |
| Shares Outstanding (Basic) | 236.00M |
| Shares Outstanding (Diluted) | 242.00M |
Key Highlights
- 1Revenue decreased by 6% year-over-year to $3.8 billion, primarily due to a 6% drop in average selling prices (ASPs).
- 2Gross margin declined to 28.6% from 29.6% year-over-year, impacted by lower ASPs.
- 3Net income was $495 million ($2.05/share diluted), a slight decrease from $519 million ($2.06/share diluted) in the prior year.
- 4The company generated strong operating cash flow of $680 million, ending the quarter with $4.9 billion in cash and cash equivalents.
- 5Acquired sTec, Inc. (enterprise SSDs) and VeloBit, Inc. (storage optimization software) to bolster HGST's capabilities.
- 6Enterprise SSD revenue increased to $106 million, up from $70 million in the prior-year period.
- 7Announced a quarterly cash dividend of $0.25 per share and repurchased $150 million of common stock.