Western Digital Corp. on Wednesday reported financial results for the fiscal year 2012 and Q4 of FY2012 (~Q2 calendar 2012). While the company did not ship as many hard disk drives as it did last year, it did earn record revenues and profits thanks to major increases of hard disk drive pricing in the year due to flooding in Thailand. In the Q2 2012 WD returned its position as the world's No. 1 maker of hard drives, outpacing Seagate on unit basis.
“Fiscal 2012 was one of the most challenging and exciting years in our 42-year history. While responding to two major natural disasters and completing the largest acquisition in the history of the industry, we achieved year-over-year revenue growth of 31% and more than doubled earnings per share," said John Coyne, chief executive officer of WD.
Record Revenues, Record Profits and Record Shipments
For its fiscal year 2012, WD posted revenue of $12.5 billion and net income of $1.6 billion, or $6.58 per share for fiscal year 2012, compared to fiscal 2011 revenue of $9.5 billion and net income of $726 million, or $3.09 per share. The fiscal 2012 report includes results from the company’s newly acquired HGST subsidiary from the acquisition date of March 8 through the end of fiscal 2012.
For its fourth fiscal quarter ended June 29, 2012, the company reported revenue of $4.8 billion, hard-drive shipments of 71.0 million and net income of $745 million, or $2.87 per share. In the year-ago quarter, the company reported revenue of $2.4 billion, net income of $158 million, or $0.67 per share, and shipped 53.8 million hard drives.
“In the June quarter, demand was in line with our forecast as industry shipments reached 157 million units, bringing total HDD shipments for the year to 599 million units. Our WD and HGST subsidiaries both performed ahead of plan in Q4, delivering great products with consistent execution, resulting in strong revenue growth, gross margin and cash flows,” added Mr. Coyne.
WD Will Not Restore All Manufacturing Capacities
Even though Western Digital clearly returned its position as the world's largest maker of hard disk drives with 71 million units shipped, which is around five million more than Seagate supplied in approximately the same time frame, the company said it would not restore all of manufacturing capacities it and Hitachi GST owned before the flood given the current macroeconomic situation.
"We expect that we will not spend the full recovery capital that we indicated of $650 million now, because, obviously, we are not bringing the capacity back to the same level. We earmarked that number at about $400 million as oppose to the $650 million," said Wolfgang Nickl, chief financial officer of Western Digital, during a conference call with financial community.
Tags: WD, Western Digital, Hitachi GST, HGST
Comments currently: 8
Discussion started: 07/26/12 02:08:48 AM
Latest comment: 07/27/12 08:32:16 PM
Where is the EU now to give them some edge for keeping UNJUSTIFIED the prices so high?? Nobody truly believes that bull shit Thy flood crap. Common!
07/26/12 02:08:48 AM]
Now that WD has a taste of epidemic corporate greed that has permeated most if not all corporations, I doubt WD will lower their prices. 31% will not be enough to satisfy the beast within regardless of a forecast of another economic storm greater than the one of 2008.
07/26/12 03:14:13 AM]
Except there actually was a flood that actually did significantly reduce production capacity for WD and many other hard drive makers with manufacturing facilities in the area. less supply increases the price of the product. And why would they lower the prices if people continue to buy the drives at the ridiculous prices they are at. Market competition and consumer buying tendencies can force their hand, the question is will they.
07/26/12 05:56:45 AM]
But..but...they raised prices, cut production, acquired the competition and reduced warranties. How is any of that good for the end user? Only good for the corporation, the shareholders and the 1%.
07/26/12 06:25:40 AM]
Uhhhhh, why? Get back to full capacity so we can see prices go down. F*ck, another reason why prices are so damn high these days, not bothering to get back up to previous capacity levels.
Enjoy your seas of money.
And as a customer, I'm trapped between WD and Seagate, there is no one else left. I have to purchase drives at these insane prices because I need space, we all do. God, its like having your balls in a vice.
07/26/12 07:44:04 AM]
Don't worry, at the prices these guys are charging, ssd will soon catch up. Then who wants an hdd when an ssd has the same capacity and same price?
07/26/12 09:28:52 PM]
Don't forget about retailers that kept the prices very high as much as possible.
Manufacturers sold 1 TB 3.5" drives for ~$75-80 since the end of April, but most retailers kept the price over $100 and just now are decreasing the price.
So there's not just one side to blame.
And there's another one. News sites that made the prices of HDDs seem justified publishing news on the floods and shortages on daily basis for several months (mostly WD and Seagate press releases), long after WD recovered most of their manufacture.
07/27/12 04:38:48 AM]
When there's a disaster, there's always a silver lining. The poor suffer and die while corporate greed posts record profits! This flooding was a Godsend to hard drive manufacturers. They're making profits they haven't made in decades.
07/27/12 08:32:16 PM]
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