Western Digital Continues Up Comeback Trail

Western Digital Corp. continued its comeback early this year, though its quarter-to-quarter profitability lost some steam after nine months of steady growth.

For its third quarter ended March 27, the company showed earnings of $1.6 million, or 5 cents a share. That contrasted with a loss of $18.6 million, or 64 cents a share, for the same period a year earlier. Revenue, however, shot up 42% to $325.4 million.

The latest results marked Western Digital’s fourth consecutive quarter of profitability after six quarters of back-to-back losses in 1991 and 1992. During the quarter ended Dec. 26, 1992, the company had posted a profit of $6.9 million, or 22 cents a share, on revenue of $343.5 million.

The company attributed its jump in sales from a year earlier to consumer demand for its new line of higher-capacity disk drives. Profitability was limited, however, by price wars in the industry.

“Some of our competition found themselves with an excess of obsolete, lower-capacity hard disks that they dumped on the market at slashed prices,” said Robert Blair, a spokesman for the Irvine-based company. “That has an impact on all disk drives, including newer products.”

In trading on the New York Stock Exchange Wednesday, Western Digital closed at $5 a share, up 12.5 cents.

Gains for Western Digital

For its third fiscal quarter ended March 27, Western Digital Corp. reported a profit of $1.6 million as its revenue rocketed 42% to $325.4 million. The company attributed the sales gain to consumer demand for its new high-capacity disk drive. Figures in thousands of dollars except data per share:

3rd qtr 3rd qtr 9 months 9 months 1992 1993 1992 1993 Revenue $229,349 $325,407 $644,794 $940,023 Net income (loss) (18,607) 1,633 (76,928) 12,713 Per share (loss) (0.64) .05 (2.64) 0.39

Source: Western Digital Corp.