Western Digital Corp.(NASDAQ:WDC) stunned analysts with better-than-expected earnings in the fourth quarter to June gaining from a recent acquisition and quick recovery from disruption to its Thailand operations from flooding late last year.
The California-based firm that makes hard drives, on Wednesday reported a five-fold jump in net income to $745 million in the June quarter, up from $158 million in the year-ago quarter. Revenues were almost double at $4.75 billion compared to $2.40 billion a year earlier.
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Adjusted earnings for the quarter, which excluded cost of restructuring, came in at $3.35 a share, while analysts had polled earnings at $2.47 a share and revenues at $4.25 billion.
For 2011/12, WDC's net income rose to $1.61 billion or $6.58 per share, from $726 million or $3.09 per share, a year earlier. Revenues were up 31 percent to $12.48 billion.
Western Digital Chief Executive John Coyne, in an earnings call with analysts forecast adjusted earnings at $10 a share for the current full year, above the $8.06 that analysts are expecting.
The results and the strong guidance sent the company's shares soaring about 19 percent to $38.61 in pre-market session. Coyne attributed the results to high sales volumes and better price realisations. He said growth in the future would be fuelled by the demand for mobile devices such as tablets and smartphones which were getting more powerful and required more storage capabilities.
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The company had completed its $3.9 billion-acquisition of Hitachi Global Storage Technologies in March 2011, and the June quarter marked the unit's first full period of contribution.
The storage industry, including hard-disk drive makers, has been going through a slump due to weak demand from PC makers, while floods in Thailand last year had severely hit the operations of many in the sector including WDC. Its unit, Western Digital and Hitachi had also performed ahead of plan, Coyne said.
Shares of other hard-disk drive makers jumped as well including Seagate Technology PLC(NASDAQ:STX) rose 13% to $29.70 in the pre-market, OCZ Technology Group Inc.(NASDAQ:OCZ) added 2% and EMC Corporation(NYSE:EMC) surged 1.55%.