Struggling hard drive manufacturer Western Digital Corp warned Tuesday that its first-quarter results will fall below current Wall Street expectations. The Irvine, California-based company said it is expecting a loss of about $1.20 to $1.30 per share, excluding one-time items, when analysts surveyed by First Call had been looking for a loss of $1.03. Revenue for the quarter should come in at about $550m to $560m.
For the fourth quarter, the company reported a net loss of $101.5m on revenue of $709.3m. Excluding restructuring charges of $20m stemming from job cuts, the loss amounted to $0.90 per share on a pro forma basis. In the year-ago quarter, the pro-forma loss was $1.24 per share.
The latest poor showing is being blamed on continued pricing pressure in the desktop drive business and lower unit shipments. Shortages of certain components caused the company to miss some customer shipments in August and, beyond that, OEM demand has tailed off in the past month to unexpectedly low levels. Although the company says the component issues have been resolved, it has reduced its volume plan accordingly to avoid excess inventory in the channel at the end of the quarter.
Results for the period will also include charges associated with a shift of some manufacturing operations from Singapore to Malaysia, as well as a one-time gain stemming from the early retirement of a portion of the company’s debt. Last month, Western Digital announced it would cut 2,500 jobs in Singapore, or 60% of its workforce there, in an effort to cut costs. The company now says that action will result in annualized cost savings of roughly $100m.
