• Headquarters: 3355 Michelson Drive, Irvine<br>• Employees: 62,500; 1,300 in OC<br>• Business: Disk drive maker <br>• Market value as of April 1: $8.9 billion<br>• Revenue for 12 months through Dec. 31: $9.9 billion, up 19%<br>• Net income for 12 months through Dec. 31: $1.1 billion, up 13%
Year in Review
Western Digital benefited from the ongoing economic recovery last year and extended its market share lead over its biggest rival.
The company claimed 31% of the market for disk drives for computers, portable storage drives and consumer electronics, according to data from El Segundo-based market researcher iSuppli Corp., a unit of Colorado’s IHS Inc.
That was up from 30% in 2009.
With 204 million drives sold, Western Digital topped archrival Seagate Technologies LLC of Northern California.
Seagate had 29.7% of the drive market in 2010, down from 32% a year earlier, according to iSuppli.
Western Digital’s gains helped it post double-digit rises in sales, up 18.5%, and earnings, up 13%.
The company also signed one of the largest office leases in the county in several years, taking advantage of a renters’ market.
Western Digital is the second largest public company here after Santa Ana’s Ingram Micro Inc. But it wasn’t looking to project its size with its headquarters.
“We weren’t going to spend too much,” Dick Salvi, Western Digital’s senior director of corporate services, said in an earlier interview. “We didn’t want our customers to get the impression that we were wasting our hard-earned money.”
The biggest reason for the move was to consolidate Western Digital workers who had been spread across five South County buildings into two neighboring Irvine buildings.
The company also embarked on a hiring push, growing its employee count by 36% in the past year to 62,500 people companywide.
What’s Ahead
Western Digital grabbed headlines in March when it announced plans to buy Hitachi Global Storage Technologies Ltd. for $4.3 billion.
The deal, set to close by September, promises to bring the company more than added size, customers and dominant market share. It also is set to give Western Digital an edge in drives for corporate networks—the most profitable part of an industry largely known for commodity products.
The company also is well positioned in the external drive segment, according to Aaron Rakers, an analyst with Stifel, Nicolaus & Co. Inc. in St. Louis.
“That’s the fastest growing part of the hard drive business,” he said.
Wall Street’s Take
Western Digital’s shares are down about 8% in the past 12 months to a recent market value of nearly $9 billion.
The company should benefit from stronger consumer spending in 2011. But Western Digital’s outlook is clouded by recent events in Japan.
“So far it doesn’t seem like it’s going to
be a big impact but most companies are
struggling to see what the impact could be in the next couple of months,” said Kaushik Roy, an analyst at Wedbush Securities Inc. in San Francisco.
For the current quarter analysts, on average, are expecting sales of $2.2 billion, down 12 % from 2009, and adjusted profits of about $148 million, down 63% from last year.
