Shares of Quantum (QNTM) were up slightly in morning trading, after the disk storage drive maker reported record fourth-quarter earnings and an agreement to spin off its recording heads operation in a joint-venture with Matsushita-Kotobuki Electronics (MKE).
Quantum shares climbed as high as 2 points in morning trading from its close of 41-3/4. The company announced its earnings and the joint-venture to design and manufacture recording heads after the market's close yesterday.
The company reported net income of $87.7 million, or 1.12 cents a share, for the period ending March 31, compared with a loss of $123 million, or $2.28 a share, a year ago.
Revenues climbed to $1.56 billion in the quarter from $1.2 billion a year earlier.
Quantum's DLT tape drove fourth-quarter sales, while its high-end disk drive business turned a profit in the quarter due to its Atlas II and Viking disk drive products. In the second quarter, the company had said its earnings were hurt by its restructuring of its high-end disk drive business, when it transferred the manufacturing work to a contractor.
For the fiscal year, Quantum reported net earnings of $149 million, or $2.05 per share, compared with a loss of $90 million, or $1.74 a share, a year ago. Revenues in the year reached $5.3 billion, compared to $4.4 billion for fiscal 1996.
The results blew away a FirstCall consensus earnings estimate of 86 cents a share for the fourth quarter, and $1.76 a share for the year.
Quantum also announced that it will spin off it recording heads business into a joint-venture company to design, develop, and manufacture recording heads.
The joint venture aims to produce cost efficiencies by having vertical integration in the heads business.
MKE is expected to bring manufacturing capabilities to the deal, while Quantum will bring its position in the magneto resistive recording heads business.
Reporter Christine MacDonald contributed to this story