Tuesday, Hard drive maker Western Digital Corp. (WDC), reported a profit for the fourth quarter that declined from last year, hurt by lower revenues, despite profit from favorable settlements of restructuring accruals and gain on the sale of assets from the its media substrate manufacturing facility.
The Lake Forest, California-based company reported net income for the fourth quarter of $196 million or $0.86 per share, compared to $213 million or $0.94 per share in the year-ago quarter.
The fourth quarter results include $5 million of income from favorable settlements of restructuring accruals and the $18 million gain on the sale of assets from the company's media substrate manufacturing facility.
Excluding items, fourth quarter net income on a non-GAAP basis was $173 million or $0.76 per share.
On average, fifteen analysts polled by Thomson Reuters expected the company to earn $0.28 per share for the quarter. Analysts' estimates typically excludes special items.
Net revenue for the quarter declined to $1.93 billion from $1.99 billion in the prior-year quarter. Thirteen analysts had a revenue consensus of $1.59 billion for the fourth quarter.
John Coyne, president and chief executive officer of WD, said, "In the June quarter, we responded promptly to capitalize on unexpected market upside in each of our served markets to produce financial results that significantly exceeded expectations, and included a return to our targeted gross margin and operating expense model parameters."
Shipments for the fourth quarter totaled about 40 million units, up from 35.2 million units in the year-ago quarter.
Total operating expenses eased to $161 million from $184 million in the third quarter of fiscal 2008.
The company generated $349 million in cash from operations during the June quarter, ending with total cash and cash equivalents of $1.8 billion.
In May 2009, Western Digital agreed to sell the assets of its media substrate manufacturing facility in Sarawak, Malaysia, to a unit of Hitachi Global Storage Technologies, the hard drive manufacturing unit of Hitachi, Ltd. The terms of the transaction were not disclosed. The sale was in line with the company's restructuring measures initiated in December 2008. Upon the closing of the sale, which took place in July 2009, Western Digital employees at the facility became employees of the purchaser.
Western Digital's rival, Seagate Technology (STX) reported a net loss of $81 million or $0.16 per share in the fourth quarter, compared to a profit of $160 million or $0.32 per share last year, hurt by lower revenues and the impact of some special items that stemmed from acquisitions and restructuring. Revenue for the quarter under review declined to $2.35 billion from $2.90 billion in the corresponding quarter last year.
For the full year 2009, Western Digital's net income decreased to $470 million or $2.08 per share from $867 million or $3.84 per share in fiscal 2008.
Net revenue for fiscal 2009 fell to $7.45 billion from $8.07 billion in the previous year.
Analysts were looking for earnings of $2.07 per share on revenues of $7.11 billion for fiscal year 2009.
WDC closed Tuesday's regular trading at $30.81, down $0.66 or 2.10%, on a volume of 7.95 million shares. Further, the stock lost $0.11 or 0.36%, and traded at $30.70 in after-hours.
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