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WD ANNOUNCES Q2 REVENUE OF $1.8 BILLION AND NET INCOME OF $14 MILLION, OR $0.06 PER SHARE Non-GAAP Net Income of $123 Million, or $0.55 per share LAKE FOREST, Calif. - Jan. 28, 2009 - Western Digital Corp. (NYSE: WDC) today reported revenue of $1.8 billion, on shipments of approximately 35.5 million units and net income of $14 million, or $0.06 per share, for its fiscal second quarter ended Dec. 26, 2008. The company's results include charges of $113 million associated with the restructuring plan announced on Dec. 17, 2008. Excluding the restructuring charges and the related tax benefit of $4 million, non-GAAP net income was $123 million or $0.55 per share.1 In the year-ago quarter, the company reported revenue of $2.2 billion, of which $2.1 billion related to the sale of hard drives. Year-ago unit shipments were 34.2 million and net income was $305 million, or $1.35 per share. The company shipped 13.8 million 2.5-inch mobile drives and 4.1 million 3.5-inch units for the PVR/DVR market, compared with 8.7 million and 4.1 million units a year ago, respectively. Branded products accounted for 22 percent of hard drive revenue in the December quarter compared with 18 percent in the year-ago quarter. The company generated $300 million in cash from operations during the December quarter, ending with total cash and cash equivalents of $1.4 billion. "Against a backdrop of unprecedented global economic turmoil and a rapid intra-quarter fall off in demand for hard drives, WD acted swiftly to align production and operating expenses with significantly lower-than-originally planned unit volumes," said John Coyne, president and chief executive officer. "With a strong balance sheet and competitive cost structure, we plan to continue investing in next-generation product platforms and technologies during this downturn. We are focused on maintaining our leadership in technology deployment, ease-of-use features, and availability of the right products for our diversified customer base. We remain enthused about our long-term prospects as a full-line storage supplier in addressing the demands of both the commercial and consumer markets as the digitization of content continues to grow." The investment community conference call to discuss these results will be broadcast live over the Internet today at 2 p.m. PST/5 p.m. EST. The call will be accessible live and on an archived basis via the link below:
About WD WD, one of the storage industry's pioneers and long-time leaders, provides products and services for people and organizations that collect, manage and use digital information. The company produces reliable, high-performance hard drives that keep users' data accessible and secure from loss. WD applies its storage expertise to consumer products for external, portable and shared storage applications. WD was founded in 1970. The company's storage products are marketed to leading systems manufacturers, selected resellers and retailers under the Western Digital and WD brand names. Visit the Investor section of the company's Web site (www.westerndigital.com) to access a variety of financial and investor information. This press release contains forward-looking statements concerning the amount and timing of the expected charges and related tax benefit associated with WD's business restructuring plan, the strength of WD's balance sheet and the competitiveness of its cost structure, WD's investment in next-generation product platforms and technologies, WD's leadership in technology deployment and product features and availability, and WD's prospects as a full-line storage supplier for commercial and consumer markets. The amount of restructuring charges recorded in the December quarter is based on current estimates and assumptions related to, among other things, the fair values of assets that will be disposed. These estimates may change up until the date of actual disposal or completion of the restructuring plan. The foregoing forward-looking statements are based on WD's current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements, including: the impact of current negative global economic conditions; supply and demand conditions in the hard drive industry; actions by competitors; unexpected advances in competing technologies; uncertainties related to the development and introduction of products based on new technologies and expansion into new hard drive markets; business conditions and growth in the various hard drive markets; pricing trends and fluctuations in average selling prices; changes in the availability and cost of commodity materials and specialized product components that WD does not make internally; and other risks and uncertainties listed in WD's recent Form 10-Q filed with the SEC on October 31, 2008, to which your attention is directed. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, and WD undertakes no obligation to update these forward-looking statements to reflect subsequent events or circumstances. Financial Statements Second Quarter Fiscal 2009 Investor Information Summary 1 Non-GAAP net income consists of GAAP net income of $14 million plus $113 million of restructuring charges less $4 million of tax benefits related to the restructuring charges. Non-GAAP earnings per share of $0.55 is calculated by using the same 224 million diluted shares as is used for GAAP earnings per share. ### Western Digital, WD, and the WD logo are registered trademarks of Western Digital Technologies, Inc. in the U.S. and other countries.
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