Western Digital's quarterly results beat estimates
(Reuters) - Hard disk drive maker Western Digital Corp's (WDC.O) second-quarter results beat analysts' expectations, helped by growth in its enterprise segment.
Shipment in the enterprise segment rose about 10 percent from first-quarter levels to 6.63 million units, analyst Nehal Chokshi of Technology Insights Research told Reuters.
The segment, which caters to storage customers, is typically a higher-margin business for hard disk makers and mostly insulated from fluctuations in PC demand.
Separately, the company said it was instituting a voluntary separation program at its unit in the U.S. to cut costs as demand for its hard disk drives (HDD) remained muted.
Western Digital shares, which have risen about 34 percent in the last three months, were down about 2 percent at $46.30 in after-market trading on Wednesday. They closed at $47.07.
PC sales have been declining since consumers prefer smartphones and tablets.
Worldwide PC shipments declined to 90.3 million units in the last three months of 2012, research firm Gartner said earlier in January, indicating that the sector was suffering from a shift in consumer habits as much as a weak global economy.
It also said PC sales fell 4.3 percent in the fourth quarter.
Western Digital expects termination-related charges comprising cash severance and other one-time termination benefits. It expects to complete the program by the first quarter of fiscal 2014. (link.reuters.com/rew45t)
The company's total shipment in the second quarter increased about 108 percent from a year earlier to 59.2 million drives. Revenue rose about 90 percent to $3.8 billion.
Net income rose to $335 million, or $1.36 per share, from $145 million, or 61 cents per share, a year earlier.
The company, which along with Seagate Technology Plc (STX.O) dominates the hard disk drive market, earned $2.09 per share, excluding items.
Analysts expected adjusted earnings of $1.82 per share on revenue of $3.68 billion, according to Thomson Reuters I/B/E/S.
Western Digital has recovered fast after its manufacturing facilities in Thailand were hit by floods in 2011.
Thailand, which accounted for over half of the world's hard disk drive production, saw its worst flooding in decades that threw industrial production off track as factories and estates remained inundated.
Seagate said earlier this month that it expects to report higher second-quarter revenue than its previous forecast.
(Reporting by Chandni Doulatramani in Bangalore; Editing by Joyjeet Das)