Summary
Western Digital Corporation (WDC) reported its financial results for the third quarter of fiscal year 2018, ending March 30, 2018. The company experienced a significant increase in revenue, up 7.8% year-over-year to $5.013 billion, driven by growth in both flash memory and hard disk drive (HDD) products, particularly within the Data Center Devices and Solutions segment. Gross profit saw a substantial increase of 26.5%, aided by improved gross margins attributed to a favorable demand environment for flash products and cost efficiencies. However, the quarter was heavily impacted by a large "Other expense, net" of $898 million, primarily due to an $894 million loss on extinguishment of debt. This resulted in a net loss of $61 million for the quarter, a significant decrease from the $248 million net income reported in the prior year's comparable quarter. Despite the net loss, cash flow from operations remained strong at $3.342 billion for the nine months ended March 30, 2018, supporting the company's liquidity. Management stated their belief that existing cash, cash equivalents, and available credit facilities are sufficient to meet foreseeable financial needs.
Financial Highlights
57 data points| Revenue | $5.01B |
| Cost of Revenue | $3.09B |
| Gross Profit | $1.93B |
| SG&A Expenses | $376.00M |
| Operating Expenses | $1.01B |
| Operating Income | $914.00M |
| Interest Expense | $160.00M |
| Net Income | $61.00M |
| EPS (Basic) | $0.20 |
| EPS (Diluted) | $0.20 |
| Shares Outstanding (Basic) | 298.00M |
| Shares Outstanding (Diluted) | 308.00M |
Key Highlights
- 1Revenue increased by 7.8% to $5.013 billion for the quarter, driven by strong performance in Data Center Devices and Solutions.
- 2Gross profit increased by 26.5% to $1.927 billion, with gross margin improving due to favorable flash product demand and cost efficiencies.
- 3Reported a net loss of $61 million for the quarter, compared to a net income of $248 million in the prior year, largely due to significant debt extinguishment charges.
- 4Total debt was reduced by $1.94 billion year-to-date through various financing activities, including debt repayments and new issuances.
- 5Cash provided by operating activities was $3.342 billion for the nine months ended March 30, 2018, demonstrating strong operational cash generation.
- 6The company had $1.97 billion remaining under its stock repurchase program as of March 30, 2018.
- 7The company recorded a provisional income tax expense of $1.66 billion related to the one-time mandatory deemed repatriation tax under the Tax Cuts and Jobs Act of 2017.