In the face of much uncertainty and adversity Western Digital [NYSE: WDC] on Monday reported that they managed to achieve $145 Million in profit on $2.0 Billion in revenue in the 2nd quarter of the fiscal 2012 year.

There no easy way to say this, 2011 has been a rough year for Western Digital and somehow the company’s management has been successful in making sure everything went off without a hitch. For those unaware of the current hard drive market conditions, supply is extremely constrained due to the flooding that culminated in Thailand in the month of October, November and better part of December.

One of flooded Western Digital facilities in Thailand

These floods were extremely disastrous to both human life as well as one of the biggest manufacturing facilities that Western Digital has. The consequences of the Thai floods on hard drive supply have been nothing short of epic. These are primarily due to the fact that 60% of Western Digital’s manufacturing plants are located in the affected reigon. This coupled with the fact that Nidec, one the leading hard drive motor manufacturers in the world, has about 75% marketshare in their business and is also located in the affected areas. What this has done is cause an extreme short supply of hard drives for at least the next year. Western Digital estimates that supply will come back to pre-flood levels around early 2013. The interesting tidbit is that many manufacturers had been citing the fact that the hard drive shortage could impact their bottom line in the calendar 4Q 2011 (fiscal 2Q 2012 for WDC). But as we begin to look at Western Digital’s reported earnings for fiscal 2Q 2012 (calendar 4Q 2011), we don’t necessarily see that reflected in Western Digital’s earnings.

Western Digital, on Monday, reported that they managed to report $2.0 Billion in revenue with a net income/profit of $145 Million on only 28.5 Million shipped hard drives. Excluding the charges and expenses related to the Thai flooding and their planned acquisition of Hitachi GST, Western Digital actually reported a non-GAAP net income/profit for the fiscal 2Q 2012 of $358 Million. Their $2.0 Billion and $145 Million figures in the calendar 4Q 2011/fiscal 2Q 2012 are compared to the same period last year where they reported revenues of $2.5 Billion with a net income of $225 Million on shipments of 52.2 Million hard drives. This simply indicates to us and their investors that Western Digital is extremely resilient and that they are able to report a sizable profit even when they’ve almost shipped half the drives that they normally do in a single quarter. They beat everyone’s expectations and are likely to continue to do so in the coming quarters.

As a result of the constrained supplies and still fairly high demand, Western Digital’s ASP went up $22 (nearly 47%) per unit from the same quarter a year ago and $23 (49%) from the previous sequential quarter. This resulted in an ASP of $69 per unit with two customers comprising 10% of the revenue: Acer and Dell. Western Digital also talked quite a bit about the floods during their earnings call, mentioning that the cost of the Thai floods in the Fiscal 2Q 2012, calendar 4Q 2011, was $199 Million. $109 Million of fixed asset impairments and $90 Million for damaged inventory. We do not expect Western Digital to incur these costs again at such a scale.

The company also reported that they expect to get their end of hard drive production back to full capacity by the September quarter (calendar 3Q 2012). They have also reported that their plan to acquire Hitachi GST is on track to close by March 2012, nearly a year after they announced the planned acquisition.

Western Digital also mentioned in their call that they are filing a petition to vacate the $525 Million award to Seagate as a result of arbitration. And the arbitrator also awarded prejudgment interest in the amount of $105 Million. WDC claims that their petition to vacate the award is valid on the grounds that the arbitrator exceeded his authority and failed to consider relevant evidence. They anticipate that the court will hear their arguments on the petition in the March or April 2012 timeframe.

Looking forward, Western Digital expects to ship between 31 Million and 33 Million drives in the current quarter 3Q 2012 (calendar 1Q 2012). They continue to expect demand to significantly exceed industry supply capability which should further continue to drive ASP to record highs. We believe, since ASPs increased by nearly 50%, there is a similar translation in the consumer market pricing and many consumers are likely to continue to see elevated prices until the end of the year.

At the current moment, WDC is up approximately 10% since their earnings announcement on Monday.