Western Digital Reports Rise in Earnings of 52% to $12.7 Million in 2nd Quarter

Despite the bumpy skies some personal computer makers have been flying in the past 6 months, Western Digital Corp. said earnings soared 52% to $12.7 million in the second quarter from $8.3 million a year earlier.

Revenue for the period ended Dec. 31, 1988, hit $258.4 million, a 61% increase from $160.7 million in the second quarter of its fiscal 1988.

But Roger Johnson, chairman of the Irvine computer components manufacturer, said Western Digital’s third-quarter profits will suffer because the company expects to take a one-time write-off of up to $1.5 million in the period.

The write-off will reflect the costs of a previously announced cost-cutting program that includes the layoff of 290 of its 2,700 Orange County workers by the end of March. The company also has trimmed its Singapore work force by 400 through attrition and has laid off 260 additional workers at plants in Northern California, Puerto Rico and Ireland.

Aided in part by the savings from those payroll cuts, Western Digital’s net income for the first half of its current fiscal year rose to a record $25.5 million, up 25% from $20.5 million. Revenue for the 6 months totaled $505.4 million, up 68% from the $300.8 million reported a year earlier.

Johnson said the company is “very optimistic” about long-term prospects for the personal computer market but was only “cautiously optimistic” about improving sales to computer makers in the coming year.

Johnson said previously that revenue growth at Western Digital is expected to drop to 20% in fiscal 1989 from 65% in fiscal 1988.

Industry analysts say the personal computer market has been suffering because of a lack of new software to excite potential computer buyers.