Komag (Nasdaq: KMAG) discovered it had a better fourth quarter than originally reported and expects to beat first quarter estimates.
After market close Thursday, the maker of disk drive media said it now expects shipments to rise 12 percent to 18 percent sequentially in the fiscal first quarter, which ends in April. The company originally expected first quarter shipments would be roughly the same as the fourth quarter's 8.9 million units.
Komag sees strong demand for 10 gigabyte per platter disks, especially for 7,200 revolutions-per-minute drives, said T.H. Tan, president and CEO. "Further our current expectation is that the strong demand we are now experiencing will continue into the second quarter," Tan said.
Restructuring is also boosting Komag's bottom line, Tan added. Heavy use of Malaysian factories has cut production costs, he said.
"While we do not expect to become profitable at current volume levels, our first quarter financial results should show a significantly lower operating loss than in any quarter last year," Tan said.
Also Thursday, Komag announced income tax audits still going on at the end of the fourth quarter recently concluded that the company owed no taxes. As a result, Komag cut its recorded fourth quarter tax liability by $27 million.
The revised fourth quarter results now report net income of $5.9 million, or 9 cents per share, based on 65.6 million shares outstanding. Komag's earlier had reported a fourth quarter loss of $21.1 million, or 32 cents per share, based on 65.4 million shares outstanding.
Shares of Komag traded as high as 5 3/8 in afterhours activity on the Island electronic communications network, following Thursday's announcements. The stock closed Thursday's regular trading at 3 13/16, up 1/16 for the session.
Komag was the second disk drive related company on Thursday to predict stronger results. Disk drive manufacturer Maxtor (Nasdaq: MXTR) also sees a better-than-expected first quarter.>