Komag warns of wider loss, lower sales

Disk-drive manufacturer Komag gave the few investors still holding its shares more bad news Monday, warning that its first-quarter loss will be wider than expected.

Komag (Nasdaq: KMAG) executives said the company would report a loss of between 40 cents and 44 cents a share in the quarter on sales of $88 million.

First Call consensus was expecting a loss of only 21 cents a share.

Its shares fell 19 cents to 66 cents a share ahead of the warning.

The company blamed lower sales and the sluggish economy for the wider-than-expected loss.

"Despite the shortfall in the first quarter, we expect our shipments to improve to around 15 million units in the second quarter," said Chief Executive Officer T.H. Tan in a prepared release. "We also remain on track to significantly improve our operating performance in the second half of this year."

Analysts were projecting a loss of 76 cents a share in the fiscal year on sales of $435 million. Both of those targets will likely be adjusted due to Monday's announcement.

Komag executives said it would ship 12.7 million drives this quarter, down from the 14.3 million units it originally projected.

Last quarter, Komag lost $43.7 million, or 40 cents a share, on sales of $111.2 million.

Its shares tumbled to a 52-week low of 53 cents a share in December after peaking at $4.50 last March.