Western Digital Corporation is much more dependent on the solid-state storage market than Seagate Technology and as a result, amidst lower prices in this segment, reported typical financial results not just in the fourth fiscal quarter, but throughout the year. In the latter case, revenue fell 34% and the annual loss was $1.7 billion.
In fact, to make results from past reporting periods more presentable, Western Digital Corporation has highlighted the ongoing momentum in changes in its financial metrics — while negative in many cases, it hasn’t deterred investors with large absolute declines. The company’s total revenue for the most recent quarter fell 41% year over year to $2.67 billion and 5% sequentially. Following the results for the full fiscal year, it fell 34% to $12.32 billion.
WDC’s cloud segment accounted for 37% of all revenue in the fourth quarter, but year-over-year revenue was nearly halved to $994 million. According to the manufacturer’s press release, the revenue came from sales of both solid-state drives and hard drives to magnetic platters. The customer segment represented 39% of WDC’s quarterly revenue, and year-over-year, the corresponding portion of revenue declined 37% to $1.035 billion but grew 6% sequentially, driven by increased shipments of game console drives.
Finally, the consumer segment accounted for 24% of WDC revenue most recently and grew 3% sequentially, driven by higher retail SSD shipments, but declined 19% year over year to $643 million. Direction decreased by 34%, in the consumer segment it decreased by 39%, in the consumer segment by 26%.
Profit margin for the fourth quarter decreased to 3.4% year-on-year from 31.9%, operating expenses decreased 16% to $742 million, operating losses were $650 million, net – $715 million -Dollar. Losses reached $1.3 billion, net $1.7 billion.
For the current quarter, WDC expects to generate revenue of $2.55 billion to $2.75 billion, maintain operating expenses in the range of $665 million to $685 million and a profit margin of 1.9 million to 4. maintain 0 percent. The losses due to the low capacity utilization of the HDD and SSD production lines will be between 200 and 220 million US dollars, in the past quarter they also amounted to 211 million US dollars. The company plans to significantly reduce capital expenditures in the current financial year.
The company’s management estimates that it will take cloud service providers a few more quarters to get rid of excess product inventory, and they’ve now literally suspended buying new components. WDC was forced to scale back production volumes, with the company’s shares falling 1.62% after the release of earnings reports after the main trading session ended.
Of the positives in the quarterly presentation, a 40% increase in average SSD capacity was noted in the consumer segment compared to the same period last year, while it was limited to 20% in the client segment. Last quarter, WDC began bulk shipping 26TB hard drives featuring the latest Tile Magnetic Recording (Ultra SMR) technology. Samples of 28TB hard drives with Ultra SMR recording technology will be available soon. Gross capacity of WDC hard drives shipped last quarter decreased 18% sequentially, their count decreased year-over-year to 11.8 million units from 16.5 million, and the average cost of the hard drive was $99 versus 120 US dollars in the previous year.
In the flash segment, gross capacity increased 15% sequentially. While WDC’s profit margin in the SSD segment was negative (11.9%) last quarter, it reached 20.7% in the HDD segment. Incidentally, more than 50% of WDC’s revenue last quarter was driven by its solid-state drive offering ($1.4 billion), while hard drives accounted for only about $1.3 billion.