Western Digital: Fiscal 4Q18 Financial Results

Demand for HDDs and flash-based offerings remained strong

Western Digital Corp. reported revenue of $5.1 billion for its fourth fiscal quarter ended June 29, 2018.

Operating income was $843 million with net income of $756 million, or $2.46 per share. Excluding certain non-GAAP adjustments, the company achieved non-GAAP operating income of $1.3 billion and non-GAAP net income of $1.1 billion, or $3.61 per share.

In the year-ago quarter, the company reported revenue of $4.8 billion, operating income of $652 million and net income of $280 million, or $0.93 per share. Non-GAAP operating income in the year-ago quarter was $1.2 billion and non-GAAP net income was $881 million, or $2.93 per share.
The company generated $863 million in cash from operations during the fourth fiscal quarter of 2018, ending with $5.1 billion of total cash, cash equivalents and available-for-sale securities.

On May 2, 2018, the company declared a cash dividend of $0.50 per share of its common stock, which was paid to shareholders on July 16, 2018.

For fiscal 2018, the company achieved record revenue of $20.6 billion, operating income of $3.6 billion and net income of $675 million, or $2.20 per share, compared to fiscal 2017 revenue of $19.1 billion, operating income of $2.0 billion and net income of $397 million, or $1.34 per share. On a non-GAAP basis, fiscal 2018 operating income was $5.4 billion and net income was $4.5 billion, or $14.73 per share, compared to fiscal 2017 operating income of $3.9 billion and  net income of $2.7 billion, or $9.19 per share.

The company generated $4.2 billion in cash from operations during the fiscal year 2018 and returned $1.2 billion to shareholders through share repurchases and dividends. 

The board of directors has authorized a new $5 billion share repurchase program, replacing all prior programs.

External Storage Market in India Up 13% Y/Y

India's external storage market witnessed a growth of 12.7% Y/Y (by vendor revenue) and stood at $84.1 million in 1Q18.

External storage market growth in 1Q18 was majorly driven by increased spending from banking organizations. Major Industry verticals such as banking, professional services, manufacturing, telecommunications and government together contributed to more than 80% of overall external storage market in 1Q18.

Organizations are witnessing significant data growth and there are challenges for getting IT budgets for traditional hardware. Organizations are considering technologies to help data optimization and consolidation as ways to overcome this difficulty.

Mid-range storage segment witnessed a significant growth Y/Y due to large banking and professional services deployments while entry-level storage segment saw a decline in 1Q18. Midrange external storage segment continued to lead the market with more than 58% market share in 1Q18.