WDC Smokes Consensus

B

ByLoSellHi

WD(R) Announces Q2 Revenue of $2.2 Billion and Year-Over-Year EPS Increase of 137 Percent at $1.35
45 minutes ago - PR Newswire


Western Digital Corp. (NYSE: WDC) today reported revenue of $2.2 billion, comprised of $2.084 billion of hard drive revenue and $120 million of revenue from media and substrate sales for the second fiscal quarter ending Dec. 28, 2007. Hard drive revenue grew by 46 percent over the prior-year comparative period on shipments of approximately 34.2 million units, a year-over-year increase of 40 percent in unit volume. Net income was $305 million, or $1.35 per share. EPS grew 137 percent over the prior year. In the year-ago quarter, the company reported revenue of $1.4 billion, unit shipments of 24.5 million and net income of $128 million, or $.57 per share.

Fifty-four percent of Q2 hard drive revenue was derived from non-desktop PC sources, including hard drives for notebook PCs, consumer electronics and enterprise applications, and WD branded product retail sales. This compares with a mix in the year-ago quarter of 42 percent.

The company shipped 8.7 million 2.5-inch mobile drives and 4.1 million 3.5-inch units for the PVR/DVR market, compared with 2.7 million units in each of these markets a year ago. Branded products accounted for 18 percent of hard drive revenue, continuing to demonstrate the value of WD's global brand.
 
I could've sold at 31, and am glad I didn't.
I'm loading up because the P/E ratio got WAY more attractive. They are eating Seagate's lunch.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=adcRn6urTgdw

Western Digital Profit Doubles, Topping Estimates (Update2)

By Melita Marie Garza

Jan. 23 (Bloomberg) -- Western Digital Corp., the second- largest maker of computer hard-disk drives, said second-quarter profit more than doubled as orders increased for notebooks and electronics. The shares rose 5.3 percent in late trading.

Net income climbed to $305 million, or $1.35 a share, from $128 million, or 57 cents, a year earlier, the Lake Forest, California-based company said today. The company projected earnings this quarter of as much as 91 cents, compared with an average estimate of 78 cents in a Bloomberg survey of analysts.

Western Digital, which once focused on drives for desktop computers, now gets more revenue from storage for devices such as laptops and video recorders. Chief Executive Officer John Coyne bolstered the company's technology last year with the purchase of Komag Inc., a disk-component maker. That's helped give it an edge over market leader Seagate Technology.

``Western Digital did a gangbuster business,'' especially in digital video recorders, said Malcolm Polley, who oversees about $1 billion in assets as chief investment officer at Stewart Capital Advisors LLC in Indiana, Pennsylvania.

Western Digital rose $1.31 to $26.25 in extended trading after closing at $24.94 on the New York Stock Exchange.

Sales Shakeup

Sales climbed 54 percent to $2.2 billion in the second quarter, which ended Dec. 28. That beat the $2.06 billion estimate in the Bloomberg survey. Analysts had projected earnings of $1.04 a share on average.

The company hasn't seen ``any effect'' from an economic slowdown, Coyne said on a conference call. This year is an ``unprecedented growth opportunity,'' he said.

About 54 percent of revenue last quarter came from notebooks, electronics and Western Digital-branded retail products. A year earlier, they accounted for 42 percent of sales. It was the second straight quarter that most revenue came from storage for products other than desktop computers.

It was a ``blow-out quarter,'' said Mark Miller, a Danville, California-based analyst with Brean Murray Carret & Co. He advises buying the stock, which he doesn't own. ``They picked up significant share in mobile drives for notebook computers, maybe picking up as much as 2 million units from Seagate.''

Video Recorders

Shipments of drives for video recorders more than doubled from the year earlier, Western Digital said. Digital video should fuel future growth for Western Digital and Seagate, Stewart Capital's Polley said. His firm owns stock in both companies.

Western Digital's sales are about evenly divided between the U.S., Europe and Asia.

The company accounted for 22 percent of the worldwide disk- drive market in the first nine months of last year, according to research firm IDC. Seagate had 35 percent, while third-ranked Hitachi Ltd. had 18 percent.

Seagate reported sales last week that missed analysts' estimates. That company's stock has fallen 25 percent in the past year, compared with a 25 percent gain at Western Digital.
 
you could have sold at 21 and are glad you did'nt ! now the stock is closed at 25. thta makes absolutely no sense at all.
 
Quote from NY_HOOD:

i meant to say 31 and the stock is now 25.
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I could've sold at 31, NY.

I made a deliberate decision not to, it fell to 23ish, and I should have bought more.

The management is stellar and their Komag acquisition was brilliantly timed.

If you look at their EPS and EPS growth on a yoy basis, fmv should be around $54 assuming a very conservative 10 P/E ratio.
 
its a commodity my man. you should have bailed earlier. this is not a high flyer. that said,i hope you make some money on it.
 
Quote from NY_HOOD:

its a commodity my man. you should have bailed earlier. this is not a high flyer. that said,i hope you make some money on it.
More...

I disagree.

It has the growth of a growth stock, as redundant as that may sound.

Show me another company with eps growth of 137% trading at this valuation with little to no debt. I'll buy it.
 
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