Western Digital Earnings Call Nuggets: PC Market and Cost Savings Details
Sherri Scribner – Deutsche Bank: (Indiscernible) how it impacts your business. I’m sure you’ve all seen that PC units were down substantially in the March quarter, but if we look at your PC business based on the desktop and the notebook, you were up a little bit. Now, I know that those businesses are not exactly correlated, but I think some people are concerned there are some inventory building somewhere in the channel that would describe that difference between what you’re seeing and what the PC market is seeing. Can you give us some more detail why there would be a difference there?
Stephen D. Milligan – President and CEO: Sherri, this is Steve. One of the things I think that we have to continue to keep in mind, Wolfgang alluded to it in his prepared remarks is that; first thing is this, we’re becoming less and less of a PC story and more of an overall digital data growth story. So, although we are still impacted by what’s happening in the PC market, it’s becoming less and less. That being said, yes, the PC market was down. It was only down a bit more than what we actually had forecasted. So our underlying assumptions did not expect there to be particular strength in the PC business. So we were not that surprised on the downside in terms of what happened there. The fact that our units are up, was really more a reflection of our ability to gain a bit of share from an execution standpoint and then lastly as Wolfgang indicated, we do not believe at present that there is any sort of an inventory issue in terms of the PC market that we’re aware of.
Sherri Scribner – Deutsche Bank: Then for my follow-up, I just wanted to get a little more detail on the near lying market. How large do you think that market was. What do you think your share was in that market and what type of growth expectations do you have for that going forward?
Wolfgang U. Nickl – EVP and CFO: Yeah Sherri, that market grew healthy quarter-over-quarter. We believe it was up from 7.5 to like 8.5, 8.4, 8.5, like a solid increase quarter-over-quarter. Our share there is very solid. Our share is very well distributed across all of our businesses. Our average share I believe is 44.4 and I’d say all markets are plus/minus 2%, in that range and we said before that is one of the markets that we believe will show solid growth in the future and we previously said that we expect double-digit growth in those markets and that’s volume and on top of that significantly more data growth in that market in particular.
Cost Savings Details
Richard Kugele – Needham & Company: I just wanted to dive a little deeper into one of your comments on the gross margin side for some cost savings and I guess, unanticipated or accelerated cost savings, was any of that head related or the transition to new aerial density benefitting or if you can just elaborate a little bit more on those elements?
Stephen D. Milligan – President and CEO: Yeah Rich, the team’s executed very well. We had extremely good linearity which helped us earn a bit more market share from the volume was slightly higher than we thought, that helps with the overall absorption. We are not done with the areal density transition but we made solid progress. Lastly I think we have worked with our suppliers and within now what we would call in a more normal area in terms of internal/external sourcing. So all of these things paired with solid execution in both of our (subs) helped us to have better cost than what we thought.
A Closer Look: Western Digital Corp Earnings Cheat Sheet>>