Western Digital Corp. (NYSE: WDC) issued another profit warning Tuesday. The downtrodden disk-drive manufacturer said it expects to lose as much as $1.30 a share, well below First Call's expected loss of $1.06 a share.
The company is blaming competitive pricing pressure for yet another quarter of woe.
Shares closed at 4 5/8 Tuesday, far below heights in the 50s the company reached in 1997.
Revenue for the first quarter ending October 2, 1999 is expected to be in the range of $550 million to $560 million, and its loss per share in the range of $1.20 to $1.30. The loss excludes one-time charges associated with the shift of manufacturing from Singapore to Malaysian and gains associated with the early retirement of some of the company's subordinated debt.
The company also reported loss in its fourth quarter. Western Digital plays in a tough industry, and competitors Seagate, Komag, and Quantum have also been under pressure (chart). Western Digital, however, seems to be fairing much worse.
"Continued competitive pricing pressure in the desktop drive business and lower unit shipments were the primary factors in widening our loss and reducing revenue this quarter," said Chuck Haggerty, chairman, president and chief executive officer of Western Digital in a company release. He added that shortages of some desktop components caused the company to miss shipments to customers in August.
Haggerty said Western Digital's product plans are still solid, and the company also announced its consolidations of manufacturing facilities in Singapore and the shift of high volume manufacturing to Malaysia will result in annualized cost savings of approximately $100 million.