Adaptec, Inc. (Nasdaq: ADPT) posted stronger-than-expected second quarter profits Thursday of 45 cents a share, beating First Call's expectation of 41 cents a share on strong demand for its RAID computer products.
Shares slipped 9/16 to 37 5/8 in early trading Thursday. The stock has been rolling along since it staged a turnaround in its fourth quarter.
Net revenue was $194 million excluding a $3 million charge for acquired in process technology associated with Adaptec's acquisition of CeQuadrat. Revenue was up from the $118 million in the second quarter of fiscal 1999. Earnings for the quarter were $46 million, or 42 cents a share, up from $4 million in the second quarter of fiscal 1999. The acquisition of CeQuadrat was accounted for under the purchase method.
Adaptec said demand for RAID (Redundant Array of Independent Disks) products exceeded initial estimates, and the launch of its Easy CD Creator 4 fueled software sales growth. US and European sales of host I/O (Input/Output) products was especially strong in late September.
Adaptec has gained a competitive advantage and grabbed market share in host I/O by being first to market with its Ultra160, said Bob Stephens, president and chief executive officer in a company statement. Adaptec now provides Ultra160 SCSI solutions to the majority of Windows NT server vendors, and ships to customers including Compaq (NYSE: CPQ) and Hewlett-Packard (NYSE: HWP). Adaptec also brought its Ultra160 SCSI to the Linux community through a collaboration with Red Hat, and announced Ultra160 SCSI products for the Macintosh platform.
Adaptec also plans to cash in on holiday buying with the release of its SoundStream CD recording software which allows consumers to create their own compilation CDs.