IRVINE — Hampered by competitors' fierce price-cutting, Western Digital Corp. reported a 76% drop in earnings for the first fiscal quarter.
The Irvine-based company, which manufactures computer disk drives, on Wednesday reported a quarterly profit of $8.3 million, or 16 cents per share, compared to $34.7 million, or 70 cents per share, in the first quarter of 1994. Sales, however, climbed 20% to $558 million from $465 million a year earlier.
Last month, the company warned shareholders that first quarter earnings would fall far short of analysts' projections of about $20 million because of stiff price competition in the disk-drive market. Sales of disk drives account for about 94% of Western Digital's revenue.
The company said its gross margin in the first quarter was 14.5%, compared to 21% in the same three-month period a year earlier.
That margin squeeze, combined with lower-than-planned shipments of one of the company's most profitable products, "severely impacted revenues, gross margin, and profitability in the first quarter," said Chuck Haggerty, chief executive. He also said the company spent $21 million in the quarter ended Sept. 30 to purchase 1.3 million shares of Western Digital common stock as part of a stock buyback program.
Western Digital reported its financial results after the close of the stock market. The company's stock closed at $16.625, up 12.5 cents, in trading on the New York Stock Exchange.