Western Digital reports strong Q1

Storage company Western Digital has reported a 27% increase in net income to $288m for the first quarter 2010, compared to a net income of $211m in the year-ago quarter. Revenue increased 5% to $2.2 billion.

Operating income grew 36% to $319m, while diluted EPS rose 34% to $1.25. The company generated cash from operations of $434m and had total cash and cash equivalents of $2.1 billion. It shipped 44.1 million units compared to 39.4 million units in the same period last year.

During the quarter, the company announced plans to consolidate its headquarters and other Southern California operations into a single facility, relocating from its current multiple locations in Lake Forest and Aliso Viejo, California, to Irvine, California, beginning in the fourth calendar quarter of 2010.

The company also completed the sale of the assets of its media substrate manufacturing facility in Sarawak, Malaysia, to a subsidiary of Hitachi Global Storage Technologies, the hard drive manufacturing unit of Hitachi Limited.

John Coyne, president and chief executive at Western Digital, said: "For the second consecutive quarter, demand for hard drives was stronger than expected as the positive industry conditions that materialized in the June quarter continued throughout the September quarter. We believe this demand is being driven primarily by consumers as a result of the growing social media phenomenon. This is creating demand in mobile and desktop PCs, branded products and enterprise storage. Hard drive inventories remain at historically low levels, reflecting industry discipline in managing supply and demand."

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