Western Digital revenue up 30.4% in Q1
Drive shipments recover and HGST revenues boost WD results
Western Digital has reported a 30.4% growth in revenue for the quarter ended 31st March, up to $3bn from $2.3 billion in the same quarter last year.
Net income was up to $483 million, a 230% year-on-year rise.
The results for the company's fiscal third quarter included three weeks of revenues from the Hitachi Global System (HGST) business, which acquired from 8th March.
WD generated $1.2 billion in cash from operations during the March quarter, ending with total cash and cash equivalents of $3.4 billion.
"Our third quarter performance demonstrates the potential of the new Western Digital, with just three and a half weeks of HGST results combined with the standalone WD business," said John Coyne, chief executive officer of Western Digital.
"Competing in the marketplace with our separate WD and HGST subsidiaries, we now have the product portfolio, technology resources and the people to fully serve the needs of a significantly expanded customer base and to better address the tremendous growth opportunities in the storage industry in the years ahead.
"I am also pleased to announce today that the recovery activities related to both WD operations and those of our supply chain partners impacted by the Thailand floods have reached a point where we now have the capability to adequately meet anticipated customer demand in the current quarter and beyond," Coyne said.
Flooding in Thailand last had seriously impacted production of drives by Western Digital, but shipment levels had recovered significantly by the first calendar quarter of 2012, with drive shipments up to 44.2 million units, compared to 28.5 million units in Q4 2011.
Speaking to itp.net earlier this year, Daniel Mauerhofer, head of PR, EMEA & India, said the company had taken various steps to improve its supply chain in future, but predicted some increase in costs of drives going forward.
"We think the fundamental difference in a post-flood recovered era versus pre-flood is that we will have created a more robust and more geographically dispersed supply chain, which will have some intrinsic cost increases relative to pre-flood footprint," said Mauerhofer. "Additionally, in getting back the capacity wiped out by the floods, there's been significant incremental spending by ourselves and by our supply chain and by the industry supply chain in general. And so we expect that, that incremental investment will be reflected in the costs that are carried forward into the future."
Mauerhofer said that WD is extending its manufacturing of sliders, one of the drive components most affected by flooding in Thailand, to Malaysia, to diversify production, and expects Malaysian sliders to ship in HDDs in the June quarter. WS is also working with suppliers to diversify supply chain sources.
Thai authorities are also working to reinforce and install flood barriers to protect the Bang Pa-in and Navanakorn Industrial Parks, and the company would take its own measures towards flood protection.