WESTERN DIGITAL CORP Quarterly Report for Q2 Ended Dec 29, 2017

Summary

Western Digital Corp. (WDC) reported its financial results for the quarter ending December 29, 2017. The company experienced a significant increase in revenue, up 9.2% year-over-year, driven by strong demand for flash-based products and growth across its product portfolio, particularly in Client Devices and Client Solutions. Despite revenue growth, the company reported a substantial net loss of $823 million for the quarter, largely due to a provisional income tax expense of $1.66 billion related to the U.S. Tax Cuts and Jobs Act of 2017. This tax reform is a significant factor impacting the company's profitability in the current period.

Key Highlights

• 1Revenue increased by 9.2% to $5.336 billion compared to the prior year's quarter, driven by strong flash memory demand and diversified product growth.
• 2Gross profit significantly improved by 31.3% to $2.013 billion, with gross margin expanding due to favorable flash-based product pricing and improved production costs.
• 3The company reported a net loss of $823 million for the quarter, a substantial decrease from the net income of $235 million in the prior year's quarter.
• 4A significant factor in the net loss was a provisional income tax expense of $1.66 billion related to the U.S. Tax Cuts and Jobs Act of 2017, covering mandatory deemed repatriation tax and deferred tax remeasurement.
• 5Operating expenses increased slightly by 7.1% to $1.058 billion, primarily due to ongoing investments in future capabilities and operating expenses from recent acquisitions.
• 6Total debt decreased from $13.356 billion to $12.237 billion, reflecting debt repayments during the period.
• 7The company's cash and cash equivalents remained strong at $6.272 billion.

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