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Western Digital Expects Loss in Fourth Quarter

September 06, 1985|BRUCE HOROVITZ | Times Staff Writer

Less than one week after it announced plans to lay off nearly 300 workers company-wide, Western Digital Corp. said Thursday that it expects to report an unspecified loss for the fourth quarter.

Ironically, the company said that the loss comes primarily because of the high costs of filling an abnormal amount of large orders for key customers.

The Irvine-based computer products maker reported net income of $3.3 million in fiscal 1984's fourth quarter.

Despite the anticipated quarterly loss, the company said that it expects to be profitable for the fiscal year ended June 30. In fiscal 1984, the company reported net income of $7.8 million.

Revenues, however, for the fiscal year and fourth quarter are expected to increase, officials said. For the fourth quarter, the company said that it expects to report a 43% rise in revenues to $60 million, from $42 million during the same period last year. The company expects to report a 57% jump in revenues for the fiscal year, to $177 million this year from $113 million last year.

Roger W. Johnson, chairman and chief executive, said in an interview Thursday: "We do not have any fundamental problems at the company. None of our plants burnt down and our orders are not going to hell." He said that the loss is attributable to a number of non-recurring factors. "It's a combination of timing, accounting and non-recurring expenses."

Also, sales of some of the company's more profitable products slipped during the fourth quarter, while sales of its less-profitable systems increased, said Johnson. He said that margins on those systems are expected to rise in 1986.

Johnson also said previously announced staff reductions of about 100 workers in Irvine, 200 employees at its Malaysian semiconductor facility and 350 temporary positions at its Camarillo board manufacturing facility will help trim company expenses.

But, he added, the layoffs are unrelated to the expected fourth-quarter loss.

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