As the market of hard disk drives expanded to 139 – 140 million units in the third calendar quarter or 2013 (which equals to Q1 FY2014 of Seagate and WD), Western Digital Corp. widened the gap with Seagate Technology and shipped nearly seven million more hard drives during the period. WD’s revenue is also considerably higher compared to Seagate’s earnings.
During the third calendar quarter of 2013, WD shipped 62.61 million hard drives, whereas Seagate’s shipments totaled 55.7 million units, according to filings from the two companies. Two of the world’s largest makers of hard disk drives believe that total available market of HDDs in Q3 2013 was 139 – 140 million units. It is logical to expect Toshiba’s hard drives shipments to be around 21.19 million units per quarter.
Unit shipments of hard drives during the quarter did not exceed those from the same period last year, which indicates continued macro-economic challenges for Seagate and Western Digital. Another evidence of challenges for the two companies is decreasing average selling price: during the quarter WD’s ASP dropped to $58, whereas Seagate’s ASP decreased to $62.
Seagate reported revenue of approximately $3.5 billion, gross margin of 28.0%, net income of $427 million and diluted earnings per share of $1.16. During the first quarter, the company generated approximately $682 million in operating cash flow, paid cash dividends of $135 million and repurchased 4 million ordinary shares for approximately $182 million.
The solid financial results we achieved this quarter reflect the ongoing execution of our business model. While the challenges of technology transitions and macro uncertainty are driving us to manage our business conservatively, we remain focused on the fact that the demand for exabytes of storage continues to increase. We continue to invest in our market-leading storage technology portfolio to enable cloud, mobile and open source storage advancement as we believe these market trends represent new and significant opportunities for Seagate,” said Steve Luczo, Seagate’s chairman and chief executive officer.
Western Digital reported revenue of $3.8 billion and net income of $495 million, or $2.05 per share for its first fiscal quarter ended September 27, 2013. The company generated $680 million in cash from operations during the September quarter, ending with total cash and cash equivalents of $4.9 billion. During the quarter, the company utilized $150 million to buy back 2.3 million shares of common stock. On September 19, the company declared a $0.25 per common share dividend, which was paid on October 15.
“We continued to perform well in the September quarter as we remained focused on delivering value to our customers through differentiated and innovative storage solutions in all of our served markets. Our HGST and WD subsidiaries continued to execute very well. Outstanding linearity drove strong operating results, with gross margins above the midpoint of our model range and earnings per share well above the high end of our guidance. Longer term, we are very excited about our ability to enable the ongoing creation, storage and management of digital content by consumers and businesses,” said Steve Milligan, president and chief executive officer.