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Western Digital Loses $45 Million in Quarter

Technology: Irvine disk-drive maker's plunge is greater than anticipated; industry rebound is seen.

April 28, 1998|From Bloomberg News

Western Digital Corp. reported a greater-than-expected fiscal third-quarter loss Monday as the computer disk-drive maker struggled with plummeting prices and a transition to new products.

Western Digital reported that it lost $45 million, or 51 cents a share. In the same quarter a year ago, the company reported net income of $82.6 million, or 88 cents a share. Sales fell about 25% to $831.3 million from $1.10 billion a year ago.

Western Digital had warned investors and analysts several times this year that it would be posting losses. Analysts estimated, however that the company would report a loss of 42 cents a share, according to IBES International Inc.

Still, the Irvine-based company said it sees some signs of recovery in the disk-drive industry, which has been battered by oversupply and weak demand. Seagate Technology Inc. and Quantum Corp., the two other large drive-makers, have seen profits and sales fall as well.

"For the first time in a while, we are beginning to see some signs of improvements in both industry conditions and our desktop business," said Charles Haggerty, chairman and chief executive.

For the first nine months, Western Digital posted a net loss of $127.5 million, or $1.46 a share, compared to a net income of $179.7 million, $1.92 a share, for the same period a year earlier. Revenue dropped 6.5% to $2.9 billion from $3.1 billion.

The results were announced after the stock markets closed. Western Digital's stock fell 75 cents a share, closing at $21.25 on the New York Stock Exchange.

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Western Woes

Western Digital's $45-million loss for the fiscal third quarter is the second consecutive quarterly loss for the Irvine-based computer disk-drive maker. Sales also declined, to $831.3 million, about 25% from a year ago. Sales and net income trends, in millions:

Sales

1998

3rd quarter: 831.3

Net Income (Loss)

1998

3rd quarter: ($45)

Source: Bloomberg News

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