Summary
Western Digital Corporation (WDC) reported a net loss of $276 million for the three months ended October 4, 2019, a significant shift from the $511 million net income in the prior year's comparable quarter. This downturn was primarily driven by a 20% year-over-year decrease in net revenue, which fell to $4.04 billion. The decline in revenue is attributed to lower average selling prices across both hard disk drives (HDDs) and flash-based products, though higher HDD volumes and moderate growth in flash-based product volumes provided some offset. The company's gross profit saw a substantial decrease of 54% to $758 million, resulting in a gross margin compression to 18.8% from 33.1% in the prior year. This was impacted by lower revenues and an additional $68 million charge related to a power outage incident at Flash Ventures. While operating expenses saw some reductions, the overall decrease in revenue and gross profit led to an operating loss of $129 million, compared to an operating income of $686 million in the previous year.
Financial Highlights
56 data points| Revenue | $4.23B |
| Cost of Revenue | $3.30B |
| Gross Profit | $935.00M |
| SG&A Expenses | $298.00M |
| Operating Expenses | $885.00M |
| Operating Income | $50.00M |
| Interest Expense | $105.00M |
| Net Income | -$139.00M |
| EPS (Basic) | $-0.47 |
| EPS (Diluted) | $-0.47 |
| Shares Outstanding (Basic) | 298.00M |
| Shares Outstanding (Diluted) | 298.00M |
Key Highlights
- 1Reported a net loss of $276 million for the quarter, a significant decrease from a $511 million net income in the prior year's quarter.
- 2Net revenue declined 20% to $4.04 billion, primarily due to lower average selling prices (ASPs) across both HDDs and flash-based products.
- 3Gross profit decreased 54% to $758 million, with gross margin shrinking to 18.8% from 33.1% year-over-year.
- 4Operating loss of $129 million compared to an operating income of $686 million in the prior year.
- 5Flash-based revenue saw a significant year-over-year decline, while HDD revenue experienced a slight decrease.
- 6The company incurred a $68 million charge related to a power outage incident at Flash Ventures.
- 7Cash flow from operating activities was $253 million, down from $705 million in the prior year, with the company expressing confidence in meeting short-term liquidity needs.