Summary
Western Digital Corporation (WDC) reported financial results for the fiscal second quarter ended January 3, 2020. Revenue remained relatively flat year-over-year at $4.234 billion, largely due to a decline in average selling prices (ASPs) for flash-based products, despite increased volumes for both HDD and flash products. The company experienced a net loss of $139 million for the quarter, a significant improvement from the prior year's loss of $487 million. For the six months ended January 3, 2020, revenue declined by 11% to $8.274 billion, and the net loss widened to $415 million from a net income of $24 million in the prior year's comparable period. The company's financial performance was impacted by challenging market conditions, including declining ASPs, particularly in flash products. However, there were positive signs such as stabilization in flash pricing compared to the previous quarter and strong growth in the Data Center Devices & Solutions segment. WDC also continued to manage its debt, making voluntary prepayments on its Term Loan B-4. The company anticipates that its current cash, cash equivalents, and operating cash flow will be sufficient to meet its obligations for the next twelve months.
Financial Highlights
56 data points| Revenue | $4.17B |
| Cost of Revenue | $3.17B |
| Gross Profit | $1.00B |
| SG&A Expenses | $281.00M |
| Operating Expenses | $852.00M |
| Operating Income | $153.00M |
| Interest Expense | $99.00M |
| Net Income | $17.00M |
| EPS (Basic) | $0.06 |
| EPS (Diluted) | $0.06 |
| Shares Outstanding (Basic) | 299.00M |
| Shares Outstanding (Diluted) | 303.00M |
Key Highlights
- 1Revenue for the second quarter of fiscal year 2020 was $4.234 billion, largely flat compared to the prior year's $4.233 billion.
- 2The company reported a net loss of $139 million for the quarter, an improvement from a net loss of $487 million in the same period last year.
- 3For the first six months of fiscal year 2020, revenue decreased by 11% to $8.274 billion, and the net loss was $415 million, compared to a net income of $24 million in the prior year.
- 4Gross profit for the quarter decreased by 10% to $935 million, with gross margin declining to 22.1% from 24.7% year-over-year, primarily due to lower average selling prices.
- 5The Data Center Devices & Solutions segment showed strong growth, with revenue increasing by 39% year-over-year.
- 6The company made voluntary prepayments totaling $575 million on its U.S. Term Loan B-4 during the six-month period.
- 7Cash flow from operating activities was $510 million for the six months ended January 3, 2020, down from $1.174 billion in the prior year's comparable period.