Summary
Western Digital Corporation (WDC) reported a net loss of $487 million for the three months ended December 28, 2018, a significant decrease from the previous year's comparable period. Revenue declined by 20.7% year-over-year to $4.23 billion, primarily impacted by lower average selling prices (ASPs) for flash-based products and reduced sales across its key market segments: Client Devices, Data Center Devices & Solutions, and Client Solutions. The company is facing challenges related to the cyclical nature of the flash industry, with increasing supply relative to demand leading to price declines. This has contributed to a substantial drop in gross profit and operating income. Despite the revenue and profitability challenges, WDC is actively managing its cost structure through initiatives like accelerating facility closures and rationalizing costs. The company's cash flow from operations remained positive at $1.17 billion for the six months ended December 28, 2018, though it represents a decrease from the prior year. Liquidity appears sufficient with cash and cash equivalents totaling $4.01 billion. Investors should monitor the company's ability to navigate the challenging flash market environment, manage its significant debt load, and execute its cost-saving and strategic initiatives.
Financial Highlights
57 data points| Revenue | $4.23B |
| Cost of Revenue | $3.19B |
| Gross Profit | $1.04B |
| SG&A Expenses | $309.00M |
| Operating Expenses | $868.00M |
| Operating Income | $176.00M |
| Interest Expense | $118.00M |
| Net Income | -$487.00M |
| EPS (Basic) | $-1.68 |
| EPS (Diluted) | $-1.68 |
| Shares Outstanding (Basic) | 290.00M |
| Shares Outstanding (Diluted) | 290.00M |
Key Highlights
- 1Revenue decreased by 20.7% to $4.23 billion for the three months ended December 28, 2018, compared to the prior year.
- 2Net loss of $487 million for the three months ended December 28, 2018, compared to a net loss of $823 million in the prior year's comparable period.
- 3Gross profit decreased significantly by 48.1% year-over-year due to lower average selling prices and underutilization charges.
- 4The company incurred a $49 million charge related to reduced utilization of its share of Flash Ventures' manufacturing capacity in the current quarter.
- 5Operating income declined sharply by 81.6% to $176 million.
- 6Cash and cash equivalents stood at $4.01 billion at the end of the period.
- 7Total debt remained substantial at $10.80 billion.
- 8The company repurchased $563 million of its common stock during the six months ended December 28, 2018.