Western Digital's Monster Quarter, Record Fiscal Year 2012
7/25/2012 by: Theo Valich
Western Digital Corporation (NASDAQ: WDC), world's market share leader in storage technologies announced its results for the fiscal fourth quarter and full year, and they are surprising - 31% growth in revenue, doubling net income…
The company ended its fiscal fourth quarter and the fiscal year on June 30, which is the end of second calendar quarter. The revenue achieved in the F4Q was quite impressive - $4.8 billion in revenue with GAAP net income being $745 million (Non-GAAP net income stood at $872M). Earnings per share were $3.35.
To put things of this monster quarter in right perspective, Western Digital reported fiscal 2012 revenue to the tune of $12.5 billion, with a net income of $1.6 billion, translated into $6.58 EPS (Earnings Per Share). Given that PC market sees the second calendar quarter as the "soft" one (AMD, Apple, Intel… almost all the major players missed their earnings) was the most successful quarter in the company history, achieving almost 40% of its annual revenue in a single quarter. When we take a look at profit, almost 50% of annual net income was achieved between April and June. Furthermore, the company generated $1.1 billion in cash, bringing the total amount of available cash and cash equivalents to $3.2 billion.
Western Digital faced catastrophe with the disastrous floods in Thailand during October and November 2011. WD took $214 million charge, and still recorded record revenue and income for the firm.
In order to spend it wisely, Western Digital repaid $558 million in debt and bought back over 16 million shares of common stock. Furthermore, the company took another charge of $214 million in relation to the catastrophic floods in Thailand, which flooded the Western Digital facility in charge of 60% of the overall hard drive production for the company.
The strong financial results were driven by stronger-than-ever shipments of hard drives, which are keeping steady in price. With $3.2 billion in the bank, we would not be surprised if the company guns for an acquisition or two, in order to strengthen its market presence. Truth to be told, both Western Digital and Seagate still lack proper strategy for the rising Solid State market, and during the fiscal 2013 WDC might have a situation where both Western Digital and Seagate end up acquiring companies such as Fusion-io, OCZ, Patriot Memory, Corsair Components or similar Solid State vendors.
Editor's Note: Western Digital shares skyrocketed by 18.11% in the after hours trading.
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