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WD ANNOUNCES Q2 REVENUE OF $1.4 BILLION AND NET INCOME OF $.57 PER SHARE Continued Revenue Diversification Reflects Long-Term Investment Strategy LAKE FOREST, Calif. - Jan. 25, 2007 - Western Digital Corp. (NYSE: WDC) today reported revenue of $1.4 billion on shipments of approximately 24.5 million units, and net income of $128 million, or $.57 per share, for its second fiscal quarter ended Dec. 29, 2006. These results represented strong year-over-year performance, including 28 percent growth in revenue, 35 percent unit growth and 23 percent growth in net income. In the year-ago quarter, the company reported revenue of $1.1 billion, unit shipments of 18.1 million and net income of $104 million, or $.47 per share. Forty-two percent of Q2 revenue was derived from newer market sources, while 58 percent came from hard drives configured into desktop PCs. This compares with a mix in the year-ago quarter of 26 percent newer markets versus 74 percent desktop PC revenue. The company's newer market revenue includes hard drives for notebook PCs, consumer electronics, enterprise applications, and WD branded products/retail sales. The company shipped 2.7 million 2.5-inch mobile drives and 2.7 million 3.5-inch units for the PVR/DVR market, compared with 1.4 million and 1.5 million, respectively, a year ago. The branded products/retail performance was another strong factor in the diversification of the business, accounting for approximately $238 million, or 17 percent of quarterly revenue. The success of WD branded products is being driven by strong global acceptance of the 3.5-inch My Book™ and 2.5-inch WD Passport® Portable external storage appliances, both noted for their simple and intuitive design. In the year-ago quarter, the company's branded products/retail business totaled approximately $56 million, or 5 percent of revenue. From a balance sheet perspective, the company generated $184 million in cash from operations during the December quarter, ending with total cash and short-term investments of $830 million. "The second quarter results are linked directly to the significant investments in technology and global infrastructure that WD has made over the last several years, both in traditional computing markets and in the newer consumer electronics markets for hard drives," said John Coyne, president and chief executive officer. "We continue to reinvest the strong cash flows from our ongoing business into current and future opportunities for data storage. Combined with our focus on customers, quality, reliability and execution, we believe this approach will enable us to continue delivering steady and outstanding financial performance." The investment community conference call to discuss these results and the company's outlook will be broadcast live over the Internet today at 2 p.m. PST/5 p.m. EST. The call will be accessible live and on an archived basis via the link below:
About WD WD, one of the storage industry's pioneers and long-time leaders, provides products and services for people and organizations that collect, manage and use digital information. The company produces reliable, high-performance hard drives that keep users' data close-at-hand and secure from loss. WD applies its storage expertise to consumer products for external, portable and shared storage products. WD was founded in 1970. The company's storage products are marketed to leading systems manufacturers, selected resellers and retailers under the Western Digital and WD brand names. Visit the Investor section of the company's Web site (www.westerndigital.com) to access a variety of financial and investor information. Financial Statements Second Quarter Fiscal 2007 Investor Information Summary This press release contains a forward-looking statement regarding the company's belief that its continued reinvestment of the company's cash flows into current and future opportunities for data storage and its focus on customers, quality, reliability and execution will enable the company to continue delivering steady and outstanding financial performance. This forward-looking statement is based on the company's current expectations and is subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements, including pricing trends and fluctuations in average selling prices (ASPs); actions by competitors; changes in the availability and cost of specialized product components, including media; supply and demand conditions in the hard drive industry; changes in product and customer mix; uncertainties related to the development and introduction of products based on new technologies and successful expansion into new hard drive markets; difficulties in reducing yield losses from complex manufacturing processes and new technologies; business conditions and growth in the notebook, consumer electronics, enterprise, branded products and desktop markets; and other risks and uncertainties listed in the company's recent Form 10-Q filed with the SEC on November 24, 2006, to which your attention is directed. Readers are cautioned not to place undue reliance on this forward-looking statement, which speaks only as of the date hereof, and the company undertakes no obligation to update this forward-looking statement to reflect subsequent events or circumstances. ### Western Digital, WD, the WD logo, and WD Passport are registered trademarks, and My Book is a trademark of Western Digital Technologies, Inc.
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