Western Digital announced a loss of US$21 million on $187.2 million in revenue, compared to a profit of US$40.3 million on US$233.6 million in revenue for the second quarter of 2006.
WD blamed market pressure as well as low sales volumes as part of the reason for its drop in revenue and profit. In addition, Komag (which has been announced as a WD current acquisition) attributed the high cost of ramping up perpendicular magnetic recording (PMR) as contributing to its less than stellar results this quarter.
WD shipped an impressive 25.8 million hard drives in the second quarter, in which 40% of all hard drives went to Western Digital. (Seagate only accounted for 34% and 18% went to Hitachi GST.) In a surprising turn of events, 55% of all of the hard drives sold were at least 160GB in size and many of these were destined for use in consumer applications such as DVRs, PVRs, gaming consoles, and external storage devices.
The acquisition of Komag by WD should be completed during WD’s current quarter.
Ramp up for PMR noted as factor for the loss
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David Stellmack
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