Western Digital hard drive revenue up 46%, shipments up 40%

Western Digital Corp. reported revenue of $2.2 bln, comprised of $2.084 bln of hard drive revenue and $120 mln of revenue from media and substrate sales for the second fiscal quarter ending Dec. 28, 2007. Hard drive revenue grew by 46% over the prior-year comparative period on shipments of approximately 34.2 mln units, a year-over-year increase of 40% in unit volume. Net income was $305 mln, or $1.35 per share.

EPS grew 137% over the prior year. In the year-ago quarter, the company reported revenue of $1.4 bln, unit shipments of 24.5 mln and net income of $128 mln, or $.57 per share.

Some 54% of Q2 hard drive revenue was derived from non-desktop PC sources, including hard drives for notebook PCs, consumer electronics and enterprise applications, and WD branded product retail sales. This compares with a mix in the year-ago quarter of 42%.

The company shipped 8.7 mln 2.5-inch mobile drives and 4.1 mln 3.5-inch units for the PVR/DVR market, compared with 2.7 mln units in each of these markets a year ago. Branded products accounted for 18% of hard drive revenue, continuing to demonstrate the value of WD’s global brand.

From a balance sheet perspective, the company generated $519 mln in cash from operations during the December quarter, ending with total cash, cash equivalents and short-term investments of $967 mln. During the quarter, the company used $240 mln of cash generated from operations to pay down debt acquired in the Komag acquisition.

“We are very pleased with our December quarter results and continue to be excited about our prospects in addressing the surging global demand for high-capacity storage in multiple consumer and business markets,” said John Coyne, WD president and chief executive officer.

“Our performance continues to reflect crisp and timely execution by the WD team, strong demand for hard drives and a more rational competitive pricing environment. Our operational flexibility and our technology leadership in 2.5-inch mobile hard drives enabled us to quickly react to a number of attractive market and product mix opportunities throughout the December quarter.”