StorageTek warns of disappointing results
In another grim investor alert, data-storage specialist predicts worse-than-expected revenue and earnings.
The data-storage specialist said it expects revenue for the quarter to be in the range of $510 million to $520 million, with net income per share between 29 cents and 33 cents. Analysts on average had been expecting the company to deliver $549 million in revenue, according to tracking firm Thomson One Analytics. The one analyst polled by Thomson forecast StorageTek's net income per share to be 35 cents for the quarter.
"This is not the quarter that we had expected to deliver," StorageTek CEO Patrick Martin said in a statement. "We experienced an unexpected but definite decline in order flow during the last two weeks of the quarter."
StorageTek is among a slew of publicly traded tech companies that have recently issued alerts to investors about disappointing results. Earnings warnings have come from some business software companies such as PeopleSoft and Seibel Systems. StorageTek, which makes tape devices and disk-based equipment, isn't the first storage company to disclose tough times. Hard drive makers Seagate Technology and Maxtor recently announced job cuts, citing difficult industry conditions.
A Merrill Lynch report Thursday--before the StorageTek news--offered a mixed assessment of the outlook for information technology hardware companies. "We believe most IT hardware vendors with quarters ending in June met estimates, with upside possible at Sun (Microsystems), Lexmark (International), and Apple" Computer, Merrill Lynch said. "Although enterprise demand is improving, it appears to be more gradual than many hoped."
StorageTek, which recently unveiled a tape device aimed at midsize businesses, said it will announce second-quarter results on July 20 after the market closes.