Narrower Loss for Western Digital

Disk-drive maker Western Digital Corp., benefiting from sales of drives for Microsoft Corp.’s Xbox gaming system and from a rival’s exit, cut its operating loss for its fiscal first quarter well beyond what analysts were expecting.

The Lake Forest firm posted an operating loss of $4 million, or 2 cents a share, beating Wall Street’s forecast of a loss of 5cents a share for the quarter ended Sept. 30. For last year’s fiscal first quarter, its operating loss was $35.6million, or 25 cents a share.

One-time gains from the sale of two units this year helped give the company first-quarter net income of $20.5 million, or 11 cents a share. For last year’s first three months, its net loss was $35.5 million, or 24cents a share. Quarterly sales rose 4% to $440.9 million.

“Our hard drive business has been profitable for four consecutive quarters, a period that many regard as one of the most challenging in the industry’s history,” said Matt Massengill, the firm’s president.

But the rest of its business--making information-management products for Internet and high-speed services--has been losing money amid the dot-com downturn. That side of the business lost $7.3 million in the first quarter.

Western Digital released its results after the stock market closed. The stock lost 17 cents to close at $3.33 a share on the New York Stock Exchange but went as high as $3.75 in after-hours trading.