Western Digital Says Its Profits Will Exceed Analysts’ Estimates

Showing yet more color in its corporate cheeks, Western Digital Corp. said Tuesday that it will overshoot Wall Street estimates and post “better than expected” net earnings for its fiscal first quarter ended Sept. 30.

The Irvine-based electronics manufacturer said net earnings for its quarter will range from $7.4 million to $7.8 million, up sharply from $3 million a year earlier. Analysts’ estimates generally have ranged from $6.6 million to $7.2 million.

Following the disclosure Tuesday, Western Digital common stock was the American Exchange’s ninth most-active issue, gaining $1.75 to close at $14.875 a share on volume of 190,000 shares traded. The one-day gain in Western Digital’s share price represented a 13.3% increase.

Revenues for the first-quarter will be in the “low $80 millions,” Roger Johnson, Western Digital’s chairman, president and chief executive officer, said in a telephone interview from New York. During last year’s first quarter Western Digital had a record $63 million in revenues.

Johnson attributed the strong year-to-year gain to Western Digital’s strategy of winning the most customers possible by pursuing a multitude of markets.

Western Digital spent $6 million on capital improvements and made a $5.5-million acquisition during the quarter just ended, but its cash nevertheless increased more than eightfold to $42 million by the end of September from $4.5 million a year earlier.

In the latest fiscal year, ended June 30, Western Digital reported record net income of $21.5 million, contrasted with a $4.6-million loss the prior year. Revenues for the fiscal year jumped 58% to $279.4 million, from $177.3 million.

In late September, Johnson said, Western Digital completed its purchase of Adaptive Data Systems Inc., a Pomona-based manufacturer of computer controllers. The company’s proposed $33.5-million stock-for-stock acquisition of Paradise Systems, a northern California semiconductor manufacturer, should be final by late November, Johnson said.

“The company continues to execute on its long-term strategic plan, which is to broaden its bases in the retail and OEM sectors and to increase its margins,” said Daniel J. Klesken, who follows Western Digital for the San Francisco investment firm of Montgomery Securities. “The company is just very bullish and it has a right to be.”