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Tech Industry

Legato gains on strong quarter

    Legato Systems Inc. (Nasdaq: LGTO) gained 9 percent Tuesday on the back of a strong fourth-quarter report that nailed earnings estimates and vaulted past revenue expectations.

    Shares in the maker of enterprise storage management software were up $1.5 to $17.75. The stock has revived since it stumbled after a third-quarter miss.

    Net loss, excluding the merger-related costs (net of tax), was $3.9 million as compared to net income of $6.1 million in the same period of 1999.

    Diluted loss was 4 cents a share, on target with First Call's estimate, but below diluted earnings of 7 cents a share in the fourth quarter of 1999 and a loss of a penny a share in the third quarter.

    Including merger-related costs, loss was $13.9 million as compared to a net loss of $400,000 in the same period of 1999. Diluted loss per share was 16 cents a share as compared to breakeven results from operations of a year ago.

    Despite widening losses, the company's top line figures impressed. Revenue of $58.4 million improved over $54.2 million for the third quarter of 2000 and $65.1 million for the fourth quarter of 1999. It also surpassed First Call's estimate of $52.43 million.

    For the full year 2000, revenue was $231.4 million as compared to $228.6 million in 1999. Net loss, excluding merger-related costs was $3.4 million, as compared to net income of $29.6 million in 1999. Diluted loss was 4 cents a share as compared to diluted earnings of 33 cents a share in 1999.

    The company said it is poised for growth after a turbulent 2000, with its new version of its flagship product, NetWorker 6.0, and its Celestra product, being successfully deployed with select customers.

    "The overall financial condition of the company is solid. We have a strong balance sheet today and the business pipeline looks positive as we enter 2001," said CFO Andy Brown in a company release. Brown added that the company plans to invest in the first half to build its infrastructure for long term success.