Western Digital, AST Financial Results Decline Sharply in Most Recent Quarters : Big Gains Posted by 2 Smaller Firms: Emulex, Archive

Two of Orange County’s largest computer companies, Western Digital Corp. and AST Research Inc., on Thursday reported sharply lower financial results for their most recent quarters.

But two smaller technology firms, Archive Corp. and Emulex Corp., posted big profit gains for their latest 3-month periods.

Irvine-based Western Digital, a manufacturer of personal computer components, said its earnings for the quarter ended March 26 were $4.4 million, down 47% from $8.3 million for the same period in 1988.

Revenue was $243.2 million during the third quarter of its 1989 fiscal year, up 28% from a year earlier.

Western Digital attributed the lower earnings to soft demand for its computer circuit board products. The company said earnings also were reduced by $1.6 million by costs associated with the elimination of 950 jobs--about 12% of its work force--during the quarter.

For the first nine months of its 1989 fiscal year, Western Digital earned $30 million, up 4% from $28.8 million for the same period in 1988. Revenue soared to $748.6 million, a 52% increase from a year earlier.

Business Picking Up

Despite the dip in sales of circuit board products, sales of the company’s computer graphics and communications components “experienced record demand,” Western Digital Chairman Roger W. Johnson said.

Johnson said that the company’s business had picked up in recent weeks. “However,” he added, “we will continue to focus on reducing operating expenses, manufacturing costs and inventory levels as a means towards improving earnings and generating cash from operations.”

Western Digital stock closed Thursday at $12.25 per share, down $1 in American Stock Exchange trading.

AST Research, an Irvine firm that manufactures a line of personal computers, reported a $1.3-million loss for the quarter ended March 31, compared to earnings of $5.2 million in the same period in 1988.

Company officials said the loss is attributable to interest payments on AST’s debt and an accounting adjustment caused by fluctuations in U.S. and foreign currencies.

AST’s loss for the third quarter of its 1989 fiscal year, however, was smaller than the $8.9-million deficit it reported in the second quarter.

AST’s sales were $113.8 million, up 7.5% from $105.8 million in the year-ago quarter.

AST President Safi Qureshey said the company has attempted to cut expenses and improve profit margins on its products. He said the firm improved its balance sheet during the quarter by slashing inventories by $29 million and repaying $31 million in short-term debt.

Encouraging Response

Qureshey said the company was encouraged by the response to several new personal computer models that AST began shipping to customers during the last quarter.

For the latest 9 months, AST reported a loss of $9.9 million on revenue of $333 million, compared to earnings of $10.8 million and revenue of $277 million in 1988.

AST stock closed Thursday at $8.625 per share, up 12.5 cents, in over-the-counter trading.

Archive, a Costa Mesa manufacturer of computer tape drives, reported earnings of $3.7 million in the fiscal second quarter ended March 31, up 69% from $2.2 million in the year-earlier quarter. Archive said its revenue was up 62% to $45.2 million, from $27.9 million a year ago.

Emulex posted earnings of $3.7 million during the 3 months ended April 2, its fiscal third quarter, an improvement of 57% over $2.4 million in the year-earlier period. The Costa Mesa producer of computer enhancement products said its revenue grew to $37.9 million, up 19% from $31.8 million.