Irvine-based storage products maker Western Digital Corp. after the close of trading reported December quarter revenue in line with Wall Street expectations and adjusted profits that narrowly beat estimates.
The world’s largest disk drive maker posted sales of $3.3 billion, down 15.3% from a year ago.
Adjusted profits hit $374 million, down 30.6% from a year earlier but topping targets of about $357 million.
Shares were up about 5% in Friday trading to an $11.2 billion market cap.
The company sold 49.7 million hard drives in the recent quarter, down from 51.7 million units in the September quarter.
The latest reports follows recent developments that have affected stock price and the Street’s outlook on Western Digital.
An analyst report surfaced on Monday that put its proposed $19 billion takeover of Milpitas-based SanDisk Corp. in jeopardy after hearing that Chinese information technology provider and electronics manufacturer Unisplendour Corp. may pull its $3.8 billion investment announced in September, potentially derailing the SanDisk buy.
The Beijing-based company was set to gain a 15% stake in Western Digital, but at a premium that included restrictions on access to the company’s intellectual property. Unisplendour also gained a board seat with limited rights.
On Monday Western Digital said it acquired more than 100 patents from IBM Corp. to improve technology and next-generation products.
The company a week earlier said it would close its head component front-end wafer manufacturing facility in Odawara, Japan, “to reduce manufacturing costs.”
The closure, expected by the end of March, is expected to result in pre-tax charges of about $200 million, with $90 million in asset charges, $90 million in employee termination costs and $20 million in contract terminations and other related costs.
Western Digital posted one of its worst years on record in 2015, as PC sales dipped below 300 million units for the first time since some of the darkest days of the recession in 2008, according to Framingham, Mass.-based market tracker International Data Corp.
Several contributing factors led to the global slowdown, including the popularity of smartphones and tablets, weakened global currencies, upheaval in Asian markets, longer PC lifecycles, a surge in sales of quality, low-priced PCs in 2014, and the lackluster adoption of the Windows 10 operating system.
The unwelcome mix on PCs led Western Digital’s share price to drop about 46% last year, erasing $12 billion of its market value in the process. SanDisk fared better, but its share price still dipped about 22% last year. The share price of WD’s Cupertino-based rival, Seagate Technology, plummeted nearly 45%.
