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2nd Quarter Net Earnings Up 54% for Western Digital

EARNINGS

January 21, 1986|JAMES S. GRANELLI

Citing a widening market for its products, and the effectiveness of internal cost controls, Western Digital Corp. in Irvine reported record net income and revenues for its second quarter, ended Dec. 31. Net earnings of $4.3 million were up 54% from $2.8 million in the same period the previous year. Revenues rose to $64 million, up 66% from $38.5 million.

For the first six months of its 1986 fiscal year, Western Digital had net earnings of $7.4 million, up 32% from $5.6 million. Revenues for the first six months rose to $127 million, a 65% increase from $76.8 million.

The earnings include use of tax credits for net loss carry-forwards. The credit for the quarter was $89,000 this fiscal year and $203,000 last year. The six-month credit was $652,000 this fiscal year and $405,000 a year ago.

Western Digital's performance was helped by the payroll savings that followed the layoffs of 700 of the computer parts maker's 2,600 employees during the first six months of its fiscal 1986. The company recorded a $4.6 million loss in fiscal 1985, ended June 30.

"We are particularly pleased with the continued broadening of our revenue sources in the second quarter, which reduces our dependency on any single customer, geographic market or product," said Roger W. Johnson, the company's chairman, president, and chief executive officer.

Western Digital sold, for instance, 26% of its products to IBM in the second quarter, down from 50% in the previous quarter and from 41% of sales in all of fiscal 1985. International sales expanded to 35% of the business, up from 27% in the previous quarter and 19% in fiscal 1985.

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