Western Digital Upbeat Despite Loss : Technology: Third-quarter results worse than last year’s, but disk-drive sales are improving. Company made a profit in March.

Despite a third-quarter loss nearly double last year’s, Western Digital Corp. said that its computer disk-drive sales have improved lately and that in March the company had a profitable month for the first time in more than a year.

For the quarter the company lost $18.6 million, equal to 64 cents per share, compared to a loss of $10.8 million, or 37 cents per share, a year earlier. The loss is a slight improvement over the company’s second-quarter loss of $20 million.

Sales fell 7.2% to $229.3 million from $247.1 million a year earlier. The fiscal 1991 figure includes $31 million in sales from a network products division that Western Digital sold last fall.

Roger W. Johnson, chairman of the company, was upbeat because of an overall improvement in the operating performance of the company. For the third quarter, Johnson said, operating losses were $13 million, about a third of the $30.5 million in operating losses for the second quarter.

“Any loss is not good,” he said. “But the trajectories are very good. We were solidly profitable in the last month of the second quarter. We’re looking at a profit in the fourth quarter.”

Johnson said the company plans to ship 900,000 disk drives during the fourth quarter compared to 720,000 shipped in the third quarter. The mix of products will include more expensive disk drives with higher profit margins, Johnson said. The backlog of orders has grown so that the company is now taking orders for the first quarter of fiscal 1993.

The company’s stock price fell 37.5 cents to $3.875 in trading Tuesday on the New York Stock Exchange.

During the quarter, Western Digital made its first $5-million payment on its long-term bank debt since going through a financial restructuring last year.

Many analysts were expecting Western Digital’s results to be worse. They credit the reduced loss to improved conditions in the disk-drive business, which accounted for 79% of company sales in the third quarter, compared to about two-thirds in the second quarter. Prices for disk drives are falling less than 5% a quarter, contrasted with a drop of about 15% per quarter during much of last year.

“It’s a substantial loss, but they might be turning the corner because the disk-drive industry is improving now,” said Richard L. Whittington, an analyst with Gruntal & Co., an investment banking firm in New York. “Western Digital is benefiting from the recovery, and their product line looks better. There is reason for cautious optimism.”

For the nine months ended March 28, the company reported a loss of $76.9 million, or $2.64 per share, compared to a loss of $107.6 million, or $3.67 per share, a year ago.

Shipments Rise, Losses Fall A year ago, analysts were predicting the end of Western Digital, but the Irvine-based company says it may be turning the corner toward profitability with its broadened line of disk-drive products and declining operating losses. Units Shipped In thousands of units: 1991 1st. qtr.: 490 2nd. qtr.: 600 3rd qtr.: 720 4th qtr.: 900 Operating Losses In millions of dollars: * Analyst estimates operating profit of up to $3 million 1991 1st qtr.: -$32.1 2nd qtr.: -$30.5 3rd qtr.: -$13.0 4th qtr.: $3.0*

Western Digital Corp.

The computer company’s losses continue in the third quarter and revenue fell $17.8 million from the same period last year.

Figures are in thousands, except per-share data.

3th Qtr 3th Qtr 9 Months 9 Months 1992 1991 1992 1991 Revenue $229,349 $247,114 $644,794 $732,903 Net income (loss) (18,607) (10,793) (76,928) (107,631) Per share (loss) (0.64) (0.37) (2.64) (3.67)

Source: Western Digital Corp.