Western Digital Corp. (NASDAQ:WDC)

The financial data reveals significant volatility in the company’s profitability over the six-year period. Net income experienced wide fluctuations, moving from a positive $675 million in 2018 to a substantial loss of $754 million in 2019. There was a partial recovery in 2020 with a smaller loss of $250 million, followed by a return to profitability with $821 million in 2021 and a peak at $1,500 million in 2022. However, this positive trend reversed sharply in 2023, culminating in a notable loss of $1,706 million.

Actuarial pension gain (loss)

This item showed relatively minor impacts on the financials, fluctuating within a narrow range. Starting with a small loss of $1 million in 2018, it peaked at a loss of $34 million in 2019, then moved back to a modest gain by 2021 through 2023, with the highest gain of $24 million recorded in 2022. The pension gains/losses did not appear to directly contribute to the large swings in net income but exhibited some variability consistent with market or actuarial assumptions.

Foreign currency translation adjustment

The foreign currency translation adjustment displayed variability with a generally negative trend emerging from 2020 onward. While positive adjustments were noted in 2018 ($18 million) and 2019 ($25 million), the adjustment turned negative in 2020 (-$6 million) and deepened significantly by 2022 (-$239 million), improving slightly to -$80 million in 2023. This suggests increasing foreign exchange exposure or currency devaluation affecting the company’s consolidated outcomes.

Net unrealized gain (loss) on derivative contracts

This component showed considerable swings and a negative bias across much of the period. After a small gain of $2 million in 2018, losses were recorded in the following four years, with the largest loss occurring in 2022 at -$142 million. Interestingly, 2023 saw a notable recovery with a gain of $109 million, which may indicate changes in risk management strategies or market conditions impacting derivative valuations.

Other comprehensive gain (loss), net of tax

This metric mirrored the trends in foreign currency adjustments and derivatives, signaling increasing negative comprehensive adjustments beginning in 2019 (-$29 million) through to substantial losses in 2022 (-$357 million). The 2023 figure of a $38 million gain suggests some improvement or reversal in previously adverse comprehensive income impacts.

Comprehensive income (loss)

Comprehensive income closely tracked net income trends, reflecting overall profitability including other comprehensive items. The pattern follows a positive $694 million in 2018 to a significant negative $783 million in 2019, with continued losses in 2020 (-$339 million), recovery and growth in 2021 ($781 million) and 2022 ($1,143 million), before another sharp downturn to a loss of $1,668 million in 2023. This volatility highlights sensitivity to both operating results and changes in other comprehensive components such as currency effects and derivatives.

In summary, the financial data reveals a highly volatile profitability environment characterized by large swings in net income and comprehensive income, influenced by fluctuating foreign exchange rates, derivative contract valuations, and other comprehensive income elements. The years 2021 and 2022 experienced a marked recovery and peak profitability, which was not sustained into 2023, indicating potential challenges or adverse conditions affecting the most recent fiscal year.