Western Digital Stock Takes Big Hit

Western Digital Corp.’s stock tumbled to a 52-week low Wednesday in heavy trading, a day after the company warned that it will report a $100-million loss in the current quarter because of a worldwide glut of disk drives.

Shares of the Irvine disk drive maker slumped to $11.06 on the New York Stock Exchange before recovering a bit to close at $11.19, down $4.31, or nearly 28%.

More than 12.2 million shares changed hands, making the stock the fifth most active issue in U.S. markets. Western Digital volume has averaged about 2 million shares a day over the last three months.

The company also said the loss in its fiscal fourth quarter ending June 27 will put it technically in default in its credit agreements with banks.

Western Digital said it plans more cost-cutting moves in coming months, including cutting back production in its Santa Clara, Calif., factory and plants in Singapore and Malaysia.

The company said it also may continue reviewing its operations to consider more layoffs. Since November, it has trimmed its work force by 22% to 13,000 employees.

Wall Street analysts had expected the company to report a loss per share of between 45 cents and 67 cents on revenue of $830 million to $864 million. Western Digital said its results for the quarter will fall “substantially short” of those estimates.