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WD Q1 nets increased income

More hard drives sold, with better margins

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Western Digital saw hard drive shipments rise more than 8.2 per cent during the three months to 30 September 2005, the hard drive maker announced last night as it published its Q1 FY2006 financial figures.

Sales for the period reached $1.01bn, up 23 per cent on the year-ago quarter and 7.5 per cent up on the previous quarter. Unit shipments totalled 17.1m drives, up from 15.8m in Q4 FY2005 and the 14.2m drives it said it shipped this time last year.

Gross margin for the quarter was 17.7 per cent, up from the previous quarter's 17 per cent and Q1 FY2005's 13.7 per cent.

WD reported a net income of $68.6m (31 cents a share), rising to $73.4m (33 cents a share) on a non-GAAP basis. GAAP net income was up 126 per cent on the year-ago quarter and 66.5 per cent sequentially.

Desktop PC hard drives remained the biggest contributor to WD's bottom line, accounting to 75 per cent of its Q1 revenues. The rest came from notebook drives and storage for consumer electronics kit, enterprise systems and its retail products. A year ago, 80 per cent of WD's revenues came from desktop drives - last quarter, the figure had fallen to 77 per cent. Despite the decline, the desktop PC hard drive market remains strong, WD said.

Of the drives shipped in Q1, 55 per cent went through OEM channels, with 39 per cent going through distribution and the remaining six per cent shipping via retail.

WD quit the quarter with $581m of cash and short-term investments in the kitty. ®

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