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Western Digital Posts 6% Earnings Gain and a 76% Jump in Revenue

Western Digital Corp. said its earnings rose a modest 6% in its first quarter ended Oct. 1 despite a 76% gain in revenue.

The Irvine computer-products company posted earnings of $12.9 million, compared to year-earlier earnings of $12.2 million.

Western Digital Chairman Roger W. Johnson said the company showed improved profitability after a disappointing fiscal 1987, when profits declined 5%. Several factors that caused the company’s earnings to decline last year began to diminish in the final three months of the fiscal year, and continued into the first quarter.

Last year, Western Digital attributed its decline in earnings to manufacturing inefficiencies resulting from the firm’s rapid growth, higher-than-usual research and development costs and the industrywide shortage of computer memory chips.

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“The (profit) margin pressures that the company experienced in prior quarters continued to diminish,” Johnson said.

Western Digital sales were up sharply to $247 million, from $140.1 million a year ago.


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