Summary
Western Digital Corporation (WDC) reported solid financial results for the quarter ended December 27, 2013, with a 4% increase in net revenue year-over-year to $3.97 billion. This growth was driven by a 7% increase in hard drive unit shipments, although offset by a slight decrease in average selling price (ASP). The company demonstrated improved profitability, with gross margin increasing to 28.7% from 27.7% in the prior year, attributed to cost improvements and operational efficiencies. While operating income remained flat at $478 million, net income saw a substantial increase to $430 million, up from $335 million in the prior year, signaling effective cost management and a stronger bottom line. Significant strategic acquisitions, including Virident and sTec, are beginning to be integrated, with management expecting them to bolster the company's position in the enterprise SSD market and overall storage solutions. Financially, WDC maintained a strong liquidity position with $4.7 billion in cash and cash equivalents at the end of the quarter. The company also refinanced its credit facility, securing a larger $4.0 billion unsecured loan facility, demonstrating continued access to capital. Investors should note the ongoing legal proceedings related to the Seagate arbitration award, which represents a significant contingent liability, although WDC continues to vigorously defend itself.
Financial Highlights
53 data points| Revenue | $3.97B |
| Cost of Revenue | $2.82B |
| Gross Profit | $1.16B |
| SG&A Expenses | $226.00M |
| Operating Expenses | $678.00M |
| Operating Income | $478.00M |
| Net Income | $430.00M |
| EPS (Basic) | $1.82 |
| EPS (Diluted) | $1.77 |
| Shares Outstanding (Basic) | 236.00M |
| Shares Outstanding (Diluted) | 243.00M |
Key Highlights
- 1Net revenue increased by 4% year-over-year to $3.97 billion, driven by a 7% increase in hard drive unit shipments.
- 2Gross margin improved to 28.7% from 27.7% in the prior year due to operational efficiencies and cost improvements.
- 3Net income significantly increased to $430 million from $335 million year-over-year.
- 4The company acquired Virident Systems, Inc. and sTec, Inc., integrating them to strengthen its position in enterprise SSDs and overall storage solutions.
- 5Cash and cash equivalents remained strong at $4.7 billion at the end of the quarter.
- 6WDC refinanced its credit facility, obtaining a new $4.0 billion unsecured loan agreement.
- 7The company continues to aggressively repurchase shares, with $1.7 billion remaining under its stock repurchase program.