Imation, other techs issue profit warnings
Imation (NYSE: IMN) sees lower-than-expected third quarter results and is looking at strategic options.
After market close Thursday, the vendor of systems for data storage and imaging said preliminary results indicate a break even third quarter on an operating basis, excluding special charges. First Call consensus predicted a profit of 40 cents per share.
Company executives expect to report that revenue fell about 16 percent from the year-ago third quarter, when Imation posted sales of $346 million.
Also Thursday, Imation announced the hiring of Goldman Sachs & Co. to help investigate strategic alternatives, such as stock buybacks, financial restructuring, spin-offs, joint ventures and other business combinations.
Imation blamed the third quarter shortfall on weaker-than-expected demand for some of the company's mature product lines, continued pricing pressures, lower SuperDisk drive sales and the negative effect of foreign currencies, particularly the euro. About $8 million of the anticipated revenue decline was the result of foreign currency translation, the company said.
The company expects to save about $40 million in annual costs after a restructuring program that will requires about $32 million in one-time charges and a $66 million noncash software write-off in the second half of the year
Imation plans to cut about 10 percent of its workforce by the end of 2001.
For the full year, the company said operating income, excluding the restructuring charges and write-offs, will be below expectations of $67 million to $71 million.
Sales of newer products generally showed good year-over-year growth, Imation said, adding that seasonally stronger fourth quarter revenues and restructuring benefits should result in improved results sequentially.
Other companies preannouncing quarterly results:
The software company said it expected to see third quarter revenues of between $10 million and $10.2 million and a diluted loss per share of 13 cents to 17 cents, excluding a charge of $585,000 for deferred stock compensation.
Financial analysts had forecast a profit of 4 cents per share, compared with a year-ago loss of a cent per share, according to First Call.
Marimba cited a failure to complete anticipated sales transactions during the quarter. It expected some of those transactions to be completed in the fourth quarter.
The vendor of product development and design software said third quarter net income will be about break-even. Analyst consensus estimates for third-quarter earnings were 25 cents, according to First Call.
Quarterly revenues will be about $105 million, the company said.
The software vendor expects a net operating loss of 7 cents to 11 cents a share before amortization of intangibles and stock-based compensation. Analysts polled by First Call/Thomson Financial had forecast, on average, earnings of 2 cents per share.
Third quarter revenue will be $5.5 million to $6.5 million, the company said.
The Web community for young adults said revenue for its third quarter fiscal 2000 is now expected to be in the range of $5.0-$5.2 million, compared with $1.2 million for third quarter 1999.
Snowball.com expects to report a pro forma loss of 36 to 38 cents a share for the third quarter, excluding special charges. First Call's survey of four analysts predicted a loss of 42 cents per share.
Company executives credited cost cuts for producing a narrower-than-expected loss.>