Read-Rite soars to 52-week high on contract wins

Read-Rite shares rallied up 1 9/16, or 28 percent, to a 52-week high of 7 3/16 Thursday after announcing that several disk-drive manufacturers will use its latest generation of magnetoresitive recording heads.

Read-Rite officials said Samsung, Maxtor (Nasdaq: MXTR), Quantum-Hard Disk Drive (NYSE: HDD) and Western Digital (NYSE: WDC) will use its components to build drives capable of holding 20 gigabytes on 3.5 inch platters.

"Our customer 'grand slam' on these 20GB qualifications and orders, which we expect will comprise the bulk of our shipments as we exit this quarter, clearly demonstrates the company's technology leadership position on these and the other programs announced today," said CEO Alan Lowe in a prepared release. "These announcements represent a significant turning point for the company's return to profitability goal…"

Last quarter, Read-Rite posted a loss of $37.7 million, or 66 cents a share, on sales of $140.9 million.

First Call Corp. consensus expects it to lose 66 cents a share in its fourth quarter.

The stock fell to a 52-week low of 1 13/16 in June.

Five of the six analysts tracking the stock rate it a "hold."