Loss Reported by Western Digital Corp.
Western Digital Corp., a financially struggling computer products company, said Thursday that it lost $10.8 million during the third quarter on lower sales.
The Irvine-based company’s performance, though still in the red, was a marked improvement from a huge second-quarter loss of $98.5 million, a deficit the company has attributed to one-time expenses resulting from an ongoing reorganization.
The company’s loss for the third quarter ended March 30 contrasts with earnings of $8.8 million for the 1990 quarter. Revenue for the period was $247.1 million, down 14% from $288.2 million a year earlier.
Roger W. Johnson, chairman and chief executive, said the company is still feeling the effects of a reorganization program begun during the second quarter and aimed at reducing costs and focusing sales efforts on higher-profit businesses.
“We’re pleased with the progress we’re making in all areas, and we’ll be improving our financial position in the next few quarters,” Johnson said in an interview.
In December, Western Digital revamped its corporate strategy to de-emphasize less-profitable businesses like selling add-on computer boards to retailers. Instead, the company is stressing businesses like supplying microchips and disk drives to computer makers. Robert J. Blair, company spokesman, said sales of components for portable notebook computers--a relatively new business for Western Digital--accounted for 13% of revenue, or $42 million, in the third quarter. Blair said the company expects that sales of notebook computer parts will continue to pick up and will account for a third of overall sales in the fiscal year that starts July 1.
Western Digital said it continues to work with 17 different lenders to renegotiate 11 different loans covering $160 million of debt. David W. Murphy, chief financial officer, said the company wants to consolidate its bank credit agreements into a multi-year, revolving-credit facility.
Blair said Western Digital expects to conclude the loan negotiations by the end of the next quarter.
Western Digital stock closed unchanged Thursday at $5.625 per share on the American Stock Exchange.
Some analysts said the company’s restructuring and strong market acceptance of several new products, such as those for notebook computers, should put the company back in the black during the first or second quarter of the fiscal year.
WESTERN DIGITAL’S PERFORMANCE
In the third quarter ended March 30, Western Digital Corp. reported a loss of $10.8 million as its revenues plunged 14% to $247.1 million. The company attributed the loss to a continuing restructuring effort.
Figures are in thousands, except per-share data.
3th Qtr 3th Qtr 9 Months 9 Months 1991 1990 1991 1990 Revenue $247,114 $288,180 $732,903 $779,062 Net income (loss) ($10,793) $8,802 ($107,631) $14,689 Per share (loss) ($0.37) $0.30 ($3.67) $0.50
Source: Western Digital Corp.
