Western Digital Corp. reported revenue of US $940 million on shipments of approximately 15.8 million units, and net income of US $41.2 million, or US $.19 per share for its fourth fiscal quarter ended July 1, 2005, including a previously-announced US $19 million charge for settlement of a lawsuit.
On a non-GAAP basis, net income was US $60.2 million, or US $.27 per share. Gross margin for the quarter was 17.0 percent.
These results represented strong year-over-year performance, including 26 percent unit growth, 26 percent growth in revenue versus US $749 million in the year ago period and 39 percent growth in net income over the US $29.6 million reported last year. The growth in net income on a non-GAAP basis was 103 percent. A year ago, the company reported earnings of US 14 per share in the fiscal fourth quarter, shipped 12.5 million units, and posted gross margin of 13.5 percent.
From a balance sheet perspective, the company's cash and short-term investments at the end of the quarter grew to US $598 million, an increase of US $24 million from the March quarter. The company generated US $113 million in cash from operations in the June quarter. It also repurchased 1.7 million shares for approximately US $21.7 million in the June quarter. Since the inception of the share repurchase program in May 2004, the company has repurchased 6.7 million shares for approximately US $61 million.
"The bulk of the revenues were expectedly contributed by our hard drives which have become preferred items for notebook PCs, enterprise applications and personal and digital video recorders, while maintaining our leadership in the high-volume desktop PC business," said Hafeez Khawaja, Senior Regional Director, Middle East, Africa and South Asia, Western Digital. "The Middle East Market continues to grow of a steady pace and we expect substantial volumes and revenues to come from this region."
“Western Digital sales in the Middle East and Africa region saw a solid year-on-year growth of over 50 per cent, while the market grew by only 25 per cent. This excellent performance by the channel shows the contribution of WD product quality, regional local support and channel relationship to the overall growth. WD will continue to invest in the region to further strengthen its local team and be close to its channel with new and creative channel programs in coming quarters,” added Khawaja.
WD indicated that 23 percent of its Q4 revenue was derived from sources including consumer electronics, enterprise applications, notebook PCs and retail sales. Seventy-seven percent of the company's fourth quarter revenue came from hard drives configured into desktop PCs. This compares with a mix in the year-ago quarter of 15 percent non-desktop PC revenue and 85 percent desktop PC revenue. In fiscal 2005, WD funded, developed or launched several new products aimed at the consumer electronics segments for personal and digital video recorders (PVR/DVR) and handheld devices and at the markets for notebook PCs, enterprise and retail consumer storage.
“WD’s new product offering such as the 2.5" WD Scorpio, external drives like Media Center and Passport and the network hard drive NetCenter are becoming the best selling products across the Middle East, which further enhances the WD brand image among the end users. In the months ahead, we will continue to serve our customers with high quality products and maintain high standards of service as always,” added Khawaja.
For the year ended July 1, 2005, WD reported revenue of US $3.6 billion, net income of US $198.4 million and diluted earnings per share of US $.91, compared to US $3.0 billion, US $151.3 million and US $.70, respectively, for the prior year ended July 2, 2004.
About Western Digital (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’s core business produces reliable, high-performance hard drives that keep users’ data close-at-hand and secure from loss.
WD was founded in 1970. The company’s storage products are marketed to leading systems manufacturers and selected resellers 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.
