Western Digital revenue rises 55% to $4.38 billion; dividend raised 17%

Western Digital (Nasdaq: WDC) reported fiscal first-quarter revenue of $4.38 billion, up 55% from a year earlier, and said it will raise its quarterly dividend by 17%, according to its earnings release filed on Thursday.

What happened

Revenue for the quarter ended October 2 was $4.381 billion, compared with $2.818 billion a year earlier and $3.747 billion in the previous quarter. GAAP gross margin was 57.8%, up from 43.5% a year earlier; non-GAAP gross margin was 58.1%. GAAP operating income was $2.046 billion, compared with $792 million. Non-GAAP diluted earnings per share were $4.64, up 161% from $1.78, and GAAP diluted earnings per share were $4.63, up 51% from $3.07.

GAAP net income of $1.779 billion was down 44% from the previous quarter's $3.195 billion. Cash flow from operations was $1.60 billion and free cash flow was $1.38 billion.

Chief Executive Irving Tan said the company's "robust customer demand" and execution drove the results and that it is "executing well through our technology transitions to meet the growing demand for storage." Chief Financial Officer Kris Sennesael cited "robust exabyte growth and improved pricing."

Outlook and dividend

For the fiscal second quarter, Western Digital expects non-GAAP revenue of $5.1 billion plus or minus $100 million, which the company said would be up 66% to 72% from a year earlier. It expects non-GAAP gross margin of 60% to 61% and non-GAAP earnings per share of $5.80 plus or minus $0.20 on about 380 million diluted shares.

The board declared a quarterly cash dividend of $0.175 per share, payable on December 17 to holders of record on December 4. Tan said the dividend is being raised by 17%.

What to watch

The company provides earnings guidance only on a non-GAAP basis. A reconciliation to GAAP results is included in the release.