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StorageTek beats expectations, names new execs

The storage company beats analyst expectations by 2 cents and appoints new executives to move the company in a new direction.

Storage Technology beat analyst expectations by 2 cents Thursday and appointed new executives to move the company in a new direction.

The company reported net income of $31 million, or 30 cents a share, on revenue of $601.4 billion after markets closed Thursday. Analysts surveyed by First Call expected net income of 28 cents a share for the quarter, which ended Dec. 29.

StorageTek, based in Louisville, Colo., is in the midst of a turnaround strategy led by new Chief Executive Patrick Martin, who took over the company in July. Martin is focusing on the company's core business, high-end tape drives for backing up corporate data, while diversifying to products that help companies more easily use a complicated but high-speed technology called storage area networks (SANs).

The company appears to be one of the storage companies, along with EMC, QLogic and Inrange, that isn't having as much trouble as some in weathering the decline in corporate computing spending.

In December, Martin vowed to increase net income by 50 percent and revenue by a factor of eight to 10 in the next three years.

Quarter to quarter, the company's revenue decreased 9 percent, from $622 million to $601 million. In the same period, however, the company moved into profitability, with a net loss of 10 cents per share in the fourth quarter of 1999 and a net income of 30 cents per share for the same quarter of 2000, including restructuring and other charges.

The company named Gary Francis, a 24-year veteran who most recently was vice president of corporate strategy, to lead the company's tape products division. Roger Archibald will lead the company's disk unit, where he will oversee the company's SAN products.