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Western Digital (WDC)
Q3 2011 Earnings Call
April 20, 2011 6:00 pm ET
John Coyne - Chief Executive Officer, President, Executive Director and Chairman of Executive Committee
Timothy Leyden - Chief Operating Officer
Wolfgang Nickl - Chief Financial Officer and Senior Vice President
Bob Blair -
Richard Kugele - Needham & Company, LLC
Keith Bachman - BMO Capital Markets U.S.
Aaron Rakers - Stifel, Nicolaus & Co., Inc.
Robert Cihra - Caris & Company
Jayson Noland - Robert W. Baird & Co. Incorporated
Sherri Scribner - Deutsche Bank AG
Kaushik Roy - Wedbush Securities Inc.
Katy Huberty - Morgan Stanley
Joe Yoo - Citigroup Inc
Previous Statements by WDC
» Western Digital's CEO Discusses Q2 2011 Results - Earnings Call Transcript
» Western Digital CEO Discusses F1Q2011 Results - Earnings Call Transcript
» Western Digital Corporation F4Q10 (Qtr End 07/02/2010) Earnings Call Transcript
Thank you. I want to mention that we will be making forward-looking statements in our comments in response to your questions concerning benefits expected from our planned acquisition of Hitachi GST, industry conditions in the June quarter including the total available market for hard drives, customer demand, supply constraints, capacity mix, average selling price and cost of components, our presence in the traditional enterprise market, our expected capital expenditures and depreciation and amortization for fiscal 2011.
The terms of and our ability to syndicate our new credit facility to be entered into in connection with our planned acquisition of HGST, and our financial results expectations for the June quarter including revenue gross margin, expenses, tax rate, share count and earnings per share.
These forward-looking statements are based on management's current expectations and are subject to risks and uncertainties that could cause actual results to differ materially including those listed in our 10-Q filed with the SEC on January 28, 2011. We undertake no obligation to update our forward-looking statements to reflect new information or events, and you should not assume later in the quarter that the comments we make today are still valid.
In addition, references will be made during this call to historical non-GAAP financial measures as well as forward-looking estimates of non-GAAP financial measures that give effect to our planned acquisition of HGST. Investors are encouraged to review the reconciliation of the differences between the historical non-GAAP measures to the comparable GAAP financial measures in our press release and investor summary, included as Exhibits 99.1 and 99.2, respectively for the Form 8-K, we have furnished to the SEC today. Copies of which can be found under the SEC filings link in the investors relations section of our website.
The forward-looking estimates of non-GAAP financial measures that give effect to our planned acquisition of Hitachi GST exclude acquisition-related expenses that we expect to incur in connection with the transaction. And following the closing of the transaction. Because these acquisition related items will not be known to us until on or after the closing of the transaction, we are unable to provide information about or reconciliation to the most directly comparable GAAP financial measures. The impact of these excluded items may cause the estimated non-GAAP financial measures to differ materially from the comparable GAAP financial measures.
Finally, as a reminder, until our acquisition of Hitachi GST closes, WD and HGST remain independent companies, so we will not be taking any questions about HGST's business nor its financial performance. I also want to note that copies of remarks from today's call will be available on the investors section of Western Digital's website immediately following the conclusion of this call. I will now turn the call over to President and Chief Executive Officer, John Coyne.
Thank you, Bob. Good afternoon, and thank you for joining us. With me on our Q3 call are Tim Leyden, our Chief Operating Officer; and Wolfgang Nickl, our Chief Financial Officer.
First and foremost, we were pleased to determine in early March that Western Digital employees in Japan, as well as those of Hitachi GST were all safe after the tragic events of last month. Those personally affected by these events continue to be in our thoughts.
Like many technology companies, we have been busy dealing with the disruptions resulting from the events in Japan. We are also proceeding on plan with our acquisition of HGST and have made significant progress on that front. We are in the approval process with all required regulatory agencies. Our integration planning is well underway and we have successfully syndicated the loan financing associated with the transaction. We remain very excited about the potential of this acquisition.
Industry shipments came in at 160 million units for the March quarter, slightly above our original expectation of 155 million units. As customers accelerated product purchases in the last 3 weeks the quarter due to supply concerns as a result of the Japanese earthquake. Analyzing the effects of the events in Japan, on the technology industry generally, there were, and remain a number of supply chain challenges, which are impacting both demand and supply visibility in the June quarter and beyond.
Tim will describe these in more detail. But I am pleased that the WD team with strong support from our suppliers, has mitigated the initial impact on our ability to support pre-earthquake customer share awards for the June quarter. We have now turned our attention to responding to customer upside requests for this quarter, which we believe are driven by unresolved supply chain issues at competitors and to fully supporting customer needs in the September quarter. We believe end customer demand for the June quarter in all markets for HDDs is tracking to seasonally normal patterns.