Western Digital Corp (WDC) has reported a 235.14 percent jump in profit for the quarter ended Mar. 31, 2017. The company has earned $248 million, or $0.83 a share in the quarter, compared with $74 million, or $0.32 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $716 million, or $2.39 a share compared with $317 million or $1.35 a share, a year ago. Revenue during the quarter surged 64.74 percent to $4,649 million from $2,822 million in the previous year period. Gross margin for the quarter expanded 608 basis points over the previous year period to 32.76 percent. Total expenses were 88.71 percent of quarterly revenues, down from 96.88 percent for the same period last year. This has led to an improvement of 817 basis points in operating margin to 11.29 percent.
Operating income for the quarter was $525 million, compared with $88 million in the previous year period.
However, the adjusted operating income for the quarter stood at $1,015 million compared to $347 million in the prior year period. At the same time, adjusted operating margin improved 954 basis points in the quarter to 21.83 percent from 12.30 percent in the last year period.
"We reported strong financial performance in the March quarter, enabled by excellent operational execution by our team in a healthy market environment with good demand for all NAND based products, as well as for capacity enterprise and client hard drives," said Steve Milligan, chief executive officer. "We also achieved targeted cost and efficiency improvements and improved our liquidity position with strong cash flow generation."
Operating cash flow improves significantly
Western Digital Corp has generated cash of $2,498 million from operating activities during the nine month period, up 53.44 percent or $870 million, when compared with the last year period. The company has spent $446 million cash to meet investing activities during the nine month period as against cash outgo of $11 million in the last year period.
The company has spent $4,546 million cash to carry out financing activities during the nine month period as against cash outgo of $754 million in the last year period.
Cash and cash equivalents stood at $5,652 million as on Mar. 31, 2017, down 3.99 percent or $235 million from $5,887 million on Apr. 01, 2016.
Working capital remains almost stable
Western Digital Corp has recorded an increase in the working capital over the last year. It stood at $6,004 million as at Mar. 31, 2017, up 0.76 percent or $45 million from $5,959 million on Apr. 01, 2016. Current ratio was at 2.39 as on Mar. 31, 2017, down from 3.14 on Apr. 01, 2016.
Cash conversion cycle (CCC) has decreased to 10 days for the quarter from 27 days for the last year period. Days sales outstanding went down to 35 days for the quarter compared with 47 days for the same period last year.
Days inventory outstanding has decreased to 33 days for the quarter compared with 54 days for the previous year period. At the same time, days payable outstanding went down to 58 days for the quarter from 74 for the same period last year.
Debt increases substantially
Western Digital Corp has witnessed an increase in total debt over the last one year. It stood at $13,088 million as on Mar. 31, 2017, up 494.10 percent or $10,885 million from $2,203 million on Apr. 01, 2016. Total debt was 44.44 percent of total assets as on Mar. 31, 2017, compared with 14.74 percent on Apr. 01, 2016. Debt to equity ratio was at 1.19 as on Mar. 31, 2017, up from 0.23 as on Apr. 01, 2016.
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