Western Digital Posts Record Quarterly Earnings, Revenue : Computers: Analysts say the Irvine-based maker of hard disk drives correctly anticipated changes in the marketplace.

IRVINE — Riding a wave of demand for its hard disk drives for personal computers, Western Digital Corp. on Wednesday reported record quarterly earnings and revenue.

The Irvine-based technology company also announced the formation of a multimedia products group in Mountain View.

For its second fiscal quarter, which ended Dec. 31, Western Digital posted a profit of $42.6 million, or 85 cents a share. That was up dramatically from earnings of $12.5 million, or 32 cents a share, for the same period a year earlier.

Three-month revenue was $552 million, up from $371 million.

Chuck Haggerty, the company’s chairman and chief executive officer, said several big orders from Gateway 2000, Dell Computer Corp. and Compaq Computer Corp. boosted demand during the quarter and raised revenue above projections.

The strong earnings also show the company’s effort to make its manufacturing more efficient is working, he said.

“We decided about two years ago that we were in a commodity business, where what you want to do is turn your assets over faster than anybody else,” he said.

Analysts said Western Digital correctly positioned itself to make disk drives that could store the large amounts of data processed by powerful chips like Intel Corp.’s Pentium and the PowerPC chip jointly made by Apple Computer, IBM and Motorola.

“Western Digital realized early on that desktop PCs would need the big drives much sooner than everybody else,” said Roxane Googin, an analyst who follows the company for the brokerage Gruntal & Co. in Beverly Hills. “They just obliterated a lot of their competitors’ entries.”

Western Digital made about 2.6 million of the 14 million hard-disk drives manufactured during the final three months of 1994, Googin said.

Other components manufactures have also posted strong quarterly results despite continued price-cutting by major PC manufacturers such as IBM and Compaq. On Tuesday, the leading disk-drive maker, Seagate Technology Inc. of Scotts Valley, reported an 86% increase in its quarterly earnings.

On Wednesday, Western Digital also announced the creation of a division for multimedia products. The new unit will focus on manufacturing microprocessor chips and circuit boards to run audio, motion video and graphics programs.

A small division of the company and 10 employees now based in Irvine will move to Mountain View, where its operations will be combined with those of the imaging product group, which now has about 70 employees.

Jon Thompson, 47, a newly appointed vice president, has been recruited from Dell’s portable product group in Austin, Tex., to head the division.

Western Digital has 6,800 employees worldwide, including 1,200 at its Irvine headquarters. It does much of its manufacturing in Singapore.

The company lost money for three years because of fierce price wars in the hard disk manufacturing business. It posted a profit, however, for its latest fiscal year.

For the six months ended Dec. 31, Western Digital earned $77.3 million, or $1.55 a share. That was up from income of $7.4 million, or 19 cents a share, for the same period a year earlier. Six-month revenue was $1.0 billion, up from $657 million.

Western Digital’s stock closed at $19.25 a share, up 75 cents, in Wednesday’s trading on the New York Stock Exchange.

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Hard-Driving Quarter

Western Digital Corp. ended a spectacular second quarter on Dec. 31. The company reported record highs in both net income and revenue, with increases of 241% and 49% respectively. The growth was attributed to brisk activity in its disk drive and microcomputer products divisions. Figures in thousands of dollars, except per-share data:

2nd qtr 2nd qtr 6 months 6 months 1993 1994 1993 1994 Revenue $371,072 $551,944 $656,570 $1,016,534 Net income 12,487 42,554 7,389 77,272 Per share 0.32 0.85 0.19 1.55

Source: Western Digital; Researched by VALERIE WILLIAMS-SANCHEZ / Los Angeles Times