Western Digital Warns of Loss, Becoming Latest in Industry

With lower prices eating away at its profit margins, Irvine-based Western Digital Corp. said Thursday that its fiscal fourth-quarter loss would be nearly double analysts’ expectations.

In suffering what would be its seventh consecutive quarterly loss, the beleaguered computer hard-drive maker echoed projections by two competitors earlier this month that they would not meet Wall Street estimates.

Western Digital said it would lose between $81.5 million and $88.8 million, not including a $20-million charge that it had previously said it would incur as part of a restructuring of its business. Analysts had expected a loss of about $44 million.

“The pricing pressures we have seen so far this quarter in the desktop drive business, especially in the last three weeks, are among the worst I have seen in the hard-drive industry,” said Charles Haggerty, the company’s chairman, president and chief executive, during a conference call with financial analysts.

As recently as April, Western Digital had said it hoped to reach a break-even point on an operating basis by the end of September. Now, officials say Western Digital will be in the red at least until the end of March. The upcoming deficit will bring the company’s losses during the last seven quarters to more than $830 million.

Western Digital shares, which already have fallen 56% this year, lost 38 cents Thursday, closing at $6.50, a 52-week low.

Industry analysts blamed the price pressures on a new low-cost drive by Seagate Technology Inc. and on dumping of excess inventory by South Korea’s Samsung.

Earlier this month, Quantum Corp. said its earnings would be half of what analysts had expected, and Maxtor Corp. said it expected to lose between $45 million and $55 million this quarter. Analysts had expected a small profit.