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To: Bald Man from Mars who wrote (3408)	6/3/1998 3:10:00 PM
From: William Wang	Respond to of 5058

Komag Warning Doesn't Shake Depressed Disk-Drive Grp By MARIA V. GEORGIANIS Dow Jones Newswires NEW YORK -- Already trading near their 52-week lows, disk-drive stocks Wednesday have been relatively unruffled by Komag Inc.'s (KMAG) second-quarter profit warning Tuesday. Weakening prices and swollen inventories - the problems that have long bedeviled other disk-drive companies - forced Komag to forecast a second-quarter operating loss similar in magnitude to the first-quarter loss of $58 million, or $1.10 a share, and lower revenue projections for the period ending June 28. According to First Call Corp., the company was expected to post a loss of 72 cents a share for the quarter but analysts already have adjusted their forecasts in the wake of Tuesday's announcement. According to First Call, the consensus of four analysts that cover the company is that Komag will now post a loss of $1.12 a share in the period. "I don't think it's a surprise that the disk-drive business remains competitive," said analyst Andy Neff of Bear Stearns. "These stocks are more of interest to value players right now." In recent trading, Komag was down 1 1/16, or 11.6%, at 8 1/8; Western Digital Corp. (WDC) was down 1/8, or 0.8%, at 15 15/16; Seagate Technology Inc. (SEG); was down 13/16, or 4%, at 21 3/16; Read-Rite Corp. (RDRT) was up 5/16, or 3.9%, at 8 3/8; Hutchinson Technology Inc. (HTCH) was down 1/4, or 1%, at 25 1/4; and Quantum Corp. (QNTM) was off 1/16, or 0.3%, at 20 13/16. Second-quarter earnings expectations for the disk-drive makers were reduced dramatically during April and March. One market source said he thinks disk-drive stocks will begin recovering in the September quarter as the companies make strides in reducing inventory levels so that they are more in line with product demand. Several companies in this sector, including Western Digital, Quantum and Seagate, have lightened their inventory loads between the first quarter and last year's fourth quarter, the market source said. "The recovery is taking longer than anticipated," the source said. Initial expectations were that the June quarter would represent a sequential improvement for these stocks over March, he noted. Komag, for instance, had anticipated 45% revenue growth between its June and March quarters. The company has now revised that forecast down to 5% growth. -Maria V. Georgianis; 201-938-5244