WD announces Q3 revenue of $1.4 BILLION and net income of $.53 per share

LAKE FOREST, Calif. - Western Digital Corp. (NYSE: WDC) today reported revenue of $1.4 billion on shipments of approximately 24.5 million units, and net income of $121 million, or $.53 per share, for its third fiscal quarter ended March 30, 2007. The third quarter results include a $13 million recovery related to a receivable previously deemed uncollectible.

The March quarter results represented strong year-over-year performance, including growth in revenue and unit shipments of 25 percent and 30 percent, respectively. In the year-ago quarter, the company reported revenue of $1.1 billion, unit shipments of 18.8 million and net income of $102 million, or $.45 per share.

Forty-seven percent of Q3 revenue was derived from newer market sources, while 53 percent came from hard drives configured into desktop PCs. This compares with a mix in the year-ago quarter of 29 percent newer markets versus 71 percent desktop PC revenue. The company’s newer market revenue includes hard drives for notebook PCs, consumer electronics, enterprise applications, and WD branded products.

The company shipped 3.7 million 2.5-inch mobile drives and 2.6 million 3.5-inch units for the PVR/DVR market, compared with 1.4 million and 1.7 million, respectively, a year ago. The branded products business was another strong factor in the diversification of the business, accounting for approximately $266 million in revenue. The company also grew unit shipments of its 3.5-inch enterprise-class drives, including the 10,000 RPM WD Raptor® and the 7,200 RPM WD RE.

The company generated $164 million in cash from operations during the March quarter, ending with total cash and short-term investments of $875 million. It also paid off its remaining $19 million in bank debt and repurchased 1.5 million shares of common stock. Since May of 2004, the company has repurchased 11.7 million shares at a total cost of $143 million.

“The industry saw seasonally softer demand and pricing in the March quarter and we were able to adjust to those challenges and post solid financial results, generate cash and grow in several of our newer markets,” said John Coyne, president and chief executive officer of WD. “We are pleased with our financial performance as it demonstrates our execution to the flexible WD business model and our ability to perform in a wide range of market environments.”

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. PDT/5 p.m. EDT. The call will be accessible live and on an archived basis via the link below:

* Audio Webcast: www.westerndigital.com/investor -- click on “Conference Calls”
* Telephone Replay: 866-439-3725 (toll-free) or +1-203-369-1044 (international)