2012 was a difficult year for hard drive makers after flooding in Thailand seriously impacted hard drive availability. With hard drives in short supply, prices went up which meant hard drives and SSDs were closer together in price giving a boost to SSD sales. It took several months for hard drive supplies return to pre-flooding levels, but the damage had been done to many in the hard drive industry.
The problem for the hard drive industry has been the fact that sales of computers have been on the decline. The hard drive industry is very closely tied to the fortunes of the PC industry so when the PC industry is down, typically the hard drive industry is down as well. One of the biggest hard drive makers in the industry is Western Digital and the company announced its Q2 financials this week.
Western Digital reported revenue of $3.8 billion on hard drive shipments totaling 59.2 million for the quarter. Net income for the quarter was $335 million, working out to $1.36 per share for fiscal Q2. Net income for the hard drive maker was $513 million working up to $2.09 per share. That is a significant improvement from the same quarter a year ago when the company reported revenues of $2 billion, with net income of $145 million working out to only $.61 per share. In the same quarter of last year, the company shipped only 28.5 million hard drives.
Western Digital notes that it generated $772 million in cash from operations during its December quarter and ended with total cash and cash equivalents $3.8 billion. The company also used $146 million to buy back 4.2 million shares of its common stock. It looks like things are turning around for Western Digital after a difficult 2012.
"We are pleased with our December quarter results, reflecting outstanding execution and value creation by our HGST and WD® teams," said Steve Milligan, president and chief executive officer. "In an environment marked by continued macroeconomic uncertainty, soft PC demand and inventory rebalancing by our customers, we continue to manage our business by focusing on those variables that we control, allowing us to generate better than expected revenue and profitability and strong cash generation."
[via Western Digital]