Upturn ahead??
Western Digital Announces Q2 Revenue, Units, EPS Will Exceed Guidance; $14 Million Operating Profit Expected From HDD Business
To Increase Cost Efficiencies and Maintain Manufacturing Flexibility, Company Signs Agreement to Acquire Thailand Facility From Fujitsu
LAKE FOREST, Calif., Dec 20, 2001 /PRNewswire via COMTEX/ -- Western Digital Corp. (NYSE: WDC chart, msgs) today announced that revenue, unit shipments and profitability for its second fiscal quarter ending December 28, 2001 are expected to exceed its earlier guidance.
The Company expects Q2 revenue in the range of $540 million to $550 million on unit shipments of approximately 7.5 million. Earnings per share are expected to be approximately $.04 -- the Company's first profit on a consolidated basis excluding non-recurring items since the quarter ending December 1998. Western Digital had earlier said it would post revenue in the range of $490 million to $520 million on unit shipments of 6 million to 6.5 million, and would break even or report a profit of $.01 per share for the quarter. In the year-ago period, the Company reported revenue of $562 million on unit shipments of 6.1 million and a loss of $.04 per share, excluding non-recurring items.
The anticipated Q2 results include an operating profit of approximately $14 million from the hard drive business, compared with an operating profit of $12 million in the second quarter of fiscal 2001 and $4 million in the first quarter of fiscal 2002. (1)
The Company will announce its final results for the second fiscal quarter after the market closes on January 24, 2002.
"Better-than-expected demand for WD hard drives from all our channels in the PC industry underscored the strengths of our product portfolio, customer base, and business model," said Matt Massengill, chairman, chief executive officer and president of Western Digital. "We had anticipated solid sequential growth this quarter based on increases in drive shipments to Microsoft for its Xbox gaming system and from additional volumes caused by Fujitsu's exit from the desktop HDD business. In addition to these factors, the upside came from the strength of demand in the PC sector and our ability to meet that demand with our broadened family of products."
Separately, Western Digital announced it has signed a definitive agreement with Fujitsu (Thailand) Company Ltd. to purchase a 155,000-square foot hard drive and head stack assembly facility near Bangkok, Thailand. The transaction, which is expected to close in January, will include land, building and equipment. The purchase price was not disclosed and will not be material to Western Digital's current or future capital expenditures.
"The addition of this facility and its highly-trained HDD and head- stacking workforce will ensure that our manufacturing model remains highly- focused and cost efficient, and continues to have the flexibility to quickly shift mix in response to customer needs," said Arif Shakeel, executive vice president and chief operating officer of Western Digital. "As we bring on this new capability, we will maintain Western Digital's operating philosophy of managing build plans to meet existing market demand. At the same time, this step will help mitigate the potential risks of having all HDD manufacturing conducted in a single site."
Shakeel indicated that the Thailand facility will complement WD's existing manufacturing facility in Kuala Lumpur, Malaysia, by providing both head stack assembly and final assembly of its value line of hard drives. The Thailand facility will be retrofitted to the Company's processes and quality standards and is expected to be operational during the March quarter.
(1) The prior year results reflect the previously announced restatements for the adoption of SEC Staff Accounting Bulletin No. 101 and reclassification of the Company's Connex and SANavigator businesses as discontinued operations. |
