IBM Hard-Drive Unit Posts $423-Million Loss

IBM Corp., which is selling its hard-disk drive business to Japan’s Hitachi Ltd. for $2.05 billion, said the unit had a pretax loss of $423 million last year.

The world’s largest computer maker disclosed financial details on its hard-disk drive business for the first time in a filing with the Securities and Exchange Commission. It had published data only on its larger Technology Group, which includes hard-disk drives and semiconductors.

Without the hard-disk drive unit, IBM would have earned $4.59 a share in 2001, 24 cents more than the $4.35 it reported, the filing said.

The computer maker has been exiting money-losing businesses and hiring contractors to do more manufacturing to reduce costs as it copes with a sales slump.

IBM will treat the sale as a discontinued operation under generally accepted accounting principles. The computer maker issued data on the hard-disk drive business for 2001 and the first quarter of 2002 to help investors evaluate its profit from continuing operations.

IBM shares fell $1.63 to $69.67 on the New York Stock Exchange.