|
Read-Rite results retreat
|
 |
January 6, 1998: 10:50 a.m. ET
With December shipments down, tech firm expects slow first quarter
|
NEW YORK (CNNfn) - Dashing early Wall Street expectations, Read-Rite Corp. said Tuesday that reduced shipments in the last two weeks of December will drive down sales and earnings figures for the first quarter of 1988.
Read-Rite, the world's leading supplier of magnetic recording heads for computer disk drives, said it expects to report sales of $261 million for the fiscal first quarter, ended Dec. 28, 1997.
That is only nominally higher than the $251.6 million sales in the first quarter of 1997. Analysts say it is also below the bell curve of growth in a technology sector that has generally remained robust despite some recent speed-bumps.
Read-Rite said it expects additional charges in the first quarter associated with what it called an "accelerated transition" to magnetoresistive recording-head technology, accompanied by a phase-out of older, inductive recording technology. The company said these charges would surpass a previously announced $30 million figure.
Michael Geran, an analyst with Pershing, a division of Donaldson, Lufkin & Jenrette Securities Corp., attributed the lower sales and earnings to a temporary inventory glut in the disk-drive business.
"They've got some inventories to clear," Geran said, downplaying the report.
Read-Rite's announcement comes at a time when the disk-drive business, stricken by anemic sales, is in the doldrums. Last month, Seagate Technology, facing slow sales, said it would shut one of its plants in Clommel, Ireland, idling 1,400 workers.
Read-Rite, headquartered in Milpitas, Calif., employs 23,500 people and has operations in Japan, Thailand, Malaysia, the Philippines and Singapore.
The company was trading at 16-1/4 on the Nasdaq Tuesday, down 7/8, or just over 5 percent, from its previous close of 17-1/8. 
|
|
|
|
|
|
Read-Rite Corp.
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
