WD: Fiscal 2Q13 Financial Results

(in US$ million)	2Q12	2Q13	6 mo. 12	6 mo. 13
Revenues	1,995	3,824	4,689	7,859
*Growth*		92%		*68%*
Net income (loss)	145	335	384	854

Western Digital Corp.
reported revenue of $3.8 billion, hard-drive shipments of 59.2 million and net income of $335 million, or $1.36 per share for its second fiscal quarter ended Dec. 28, 2012.

On a non-GAAP basis, net income was $513 million or $2.09 per share. In the year-ago quarter, the company reported revenue of $2.0 billion, net income of $145 million, or $0.61 per share, and shipped 28.5 million hard drives. Non-GAAP net income in the year-ago quarter was $358 million, or $1.51 per share.2

The company generated $772 million in cash from operations during the December quarter, ending with total cash and cash equivalents of $3.8 billion. During the quarter, the company utilized $146 million to buy back 4.2 million shares of common stock. On Dec. 3, the company declared a $0.25 per common share dividend, which was paid on Dec. 26.

"We are pleased with our December quarter results, reflecting outstanding execution and value creation by our HGST and WD teams," said Steve Milligan, president and CEO. "In an environment marked by continued macroeconomic uncertainty, soft PC demand and inventory rebalancing by our customers, we continue to manage our business by focusing on those variables that we control, allowing us to generate better than expected revenue and profitability and strong cash generation."

Comments

Abstracts of the earnings call transcript:

Steve Milligan, president and CEO:
"In calendar 2013, we have several opportunities to improve our business. We believe that the overall market for hard drives is beginning to stabilize. We expect demand for the first half of calendar 2013 to be flat to slightly down compared with the back half of 2012. However, we are cautiously optimistic for the back half of 2013 for the following reasons: Worldwide economies continue to expand, albeit at a slow pace, with signs of further improvement in developing regions. OEM customers have largely worked through their inventory rebalancing."

Wolfgang Nickl, CFO:
"Our average HDD selling price was $62, flat with the prior quarter.
"We expect a total available market flat to slightly down when compared with the December quarter. Revenue in the range of $3.55 billion to $3.65 billion reflecting the current demand environment, the seasonal change in business mix and the conclusion of our 3.5-inch contract manufacturing arrangement with Toshiba. Gross margin of approximately 28% excluding the amortization of HGST intangibles."