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EARNINGS

Computer Memories Posts $21-Million Loss in Quarter

February 19, 1986|JAMES BATES

Computer Memories, a Chatsworth disk-drive company stung by the loss of its business with computer giant IBM, said it lost $21.3 million in the third quarter ended Dec. 31 despite an 11% increase in revenue.

The company projected that it would suffer another shortfall and declining revenue for the current quarter. During the final three months of 1984, Computer Memories' last unprofitable quarter, the company lost $8.9 million.

Computer Memories attributed its third-quarter loss to $16.1 million in write-downs of inventories, property and equipment. The company also spent $6 million to settle a patent infringement lawsuit brought by Milpitas, Calif.-based Quantum.

In addition, Computer Memories said its orders from IBM dwindled during the quarter. Computer Memories' contract with IBM, which once accounted for more than 80% of its revenue, expired Dec. 31 after IBM decided to buy disk drives from other suppliers.

For the nine months ended Dec. 31, Computer Memories lost $13.7 million, more than double the $6.5-million deficit posted in the corresponding period the year before, despite a 61% increase in revenue to $111.9 million.

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