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Retail Shoppers Saved Western Digital’s Third Quarter Revenue
No matter how anyone thinks about Western Digital hard drives, the previous quarter showed that its products are in constant demand from ordinary buyers. Thanks to the supply of HDD and SSD in the client segment, the company was able to earn a little more than it had expected itself, and experts predicted. And although the report showed losses, the exchange did not meet Western Digital’s performance with such a rapid decline in shares as one might expect.
Three months earlier, the company predicted that in the period from July to September, inclusive, revenue would fall in the range of $ 3.7 billion to $ 3.9 billion. In fact, the quarterly revenue of Western Digital in the reporting period amounted to $ 3.92 billion (in the company’s coordinate system, the third quarter of calendar 2021 is the first quarter of the fiscal year 2021). As you can see, the reality turned out to be slightly better than the forecast, although there was both a quarterly and an annual decrease in revenue. So, a year ago, over the same period, WDC earned $ 4.04 billion, or 3% more.
According to the company’s management, “difficulties” in the global economy and COVID-19 are to blame for the decline in sales. In particular, purchases of drives for servers sagged a lot. In the first half of the year, manufacturers of server products and laptops purchased drives for future use, and now they use old stocks instead of new drives. In fact, the third quarter was saved by ordinary customers who were in quarantine or remote control, as well as fans of computer games and consoles.
According to Western Digital, for the year, quarterly revenue from sales of client HDDs and SSDs grew by 20% from $ 1.616 billion to $ 1.946 billion. This segment also grew due to the increase in the supply of WDC flash memory for smartphones, especially with support for 5G. Against this background, revenue from the supply of server drives decreased over the year by 26% from $ 1.532 billion to $ 1.129 billion. In the segment of client solutions, which includes boxed versions of products, there is a slight decline at the level of 5%. In the reporting quarter, revenue in this area amounted to $ 847 million.
The company’s quarterly operating expenses for the year decreased by 6% – to $ 834 million. This positively affected the quarterly operating profit, which from last year’s losses of $ 129 million turned into profit in the amount of 70 million. Unfortunately, this did not save Western Digital from losses on the item of net profit. But this figure decreased to $ 60 million, whereas a year ago the company showed a net quarterly loss of $ 276 million.
Revenue is predicted to fall in the $ 3.75 billion to $ 3.95 billion range in the next quarter. We would like the best from the December quarter, but it looks like even Christmas won’t save the company’s revenue.