Western Digital Shows Growth in Q2 2017


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On January 20, 2017 Western Digital, a provider of storage products and solutions, announced their Q2 2017 (ending December 31, 2016) financial results.  In Q2, Western Digital realized $4.9 billion revenue with operating income of $545 million (earnings before income and taxes) and a net income of $235 million or $0.080 per share.

The company said that the GAAP net income for the quarter includes charges associated with recent acquisitions and that excluding these charges and other non-GAAP adjustments, the second operating income was $995 million and the non-GAAP net income was $675 million or $2.30 per share.

Compared to the same quarter last year, Western Digital realized a 67% increase in revenue and a 47% increase in operating income. Non-GAAP net operating income increased 43% and non-GAAP net income increased by 60%.

From a cash perspective, Western Digital reported that it generated $1.1 billion in cash from operations in the second quarter of 2017, ending with $5.2 billion in cash and cash equivalents, and available-for-sale securities.

Western Digital saw a strong increase in revenue in their second fiscal quarter due primarily to a favorable market and a strong demand for enterprise hard drives, all NAND based products, and hard drives in all client applications. Additionally, the company benefited from cost efficiency improvements and it improved its liquidity position with a strong cash flow performance.

Clearly, Western Digital had a strong Q2.  Can this kind of growth be sustained throughout the balance of its fiscal year?  No one can predict the future; however, it is reasonable to believe that with a favorable market, a strong pipeline, and continued well managed execution, the company can realize a strong Q3 and a strong year overall.