Western Digital Shows Profit After Two Quarters in the Red

Western Digital Corp., which had losses for the two previous quarters, said Thursday that it rebounded in the latest period to post a profit of $12.5 million, or 32 cents a share.

That was nearly double the computer disk drive maker’s earnings of $6.9 million, or 22 cents a share, for the same period a year earlier. Revenue for the company’s second fiscal quarter, which ended Dec. 25, was $371.1 million, up 8% from $343.5 million a year earlier.

The company, based in Irvine, said the rebound to profitability in the second quarter was because of increased sales in its disk drive business, which typically accounts for 85% of its revenue. It also follows a period of cost cutting that was capped with an announcement in October that Motorola Inc. would buy Western Digital’s semiconductor manufacturing plant in a $115-million deal.

In Thursday’s trading on the New York Stock Exchange, Western Digital shares gained 67 cents to close at $12.75.

James A. Stone, an analyst who follows Western Digital for Pennsylvania Merchant Group in Philadelphia, said the earnings report shows clearly that the company is “well on the way to recovery.”

“The electronics business is still holding them back, but they are emerging as a strong contender in the disk market. Unit sales were up 20%, and margins improved significantly.”

Stone said that Western Digital, too, is a leader in making its products less expensive by applying some of the most advanced manufacturing techniques. He said the outlook is good for personal computer sales, and that should ensure continued demand for disk drives.

For the first half of its fiscal year, Western Digital reported a profit of $7.4 million, or 20 cents a share, down 33% from $11.1 million, or 36 cents a share, for the same period a year earlier. Six-month revenue was $656.6 million, up 6.8% from $614.6 million.

Profitable Second Quarter

In its second quarter ended Dec. 25, Western Digital posted a profit of $12.5 million, or 32 cents per share, on revenue of $371.1 million. Figures in millions of dollars, except per-share data:

2nd qtr 2nd qtr 6 months 6 months 1992 1993 1992 1993 Revenue $343.5 $371.1 $614.6 $656.6 Net income (loss) 6.9 12.5 11.1 7.4 Per share (loss) $0.22 $0.32 $0.36 $0.20

Source: Western Digital; Researched by JANICE L. JONES / Los Angeles Times