Sales to Internet-related companies carried Advanced Digital Information Corp. (Nasdaq: ADIC) to better-than-expected second quarter earnings.
In fiscal second quarter results released after market close Monday, the maker of automated tape libraries and other network storage products reported net income of $3.5 million, or 35 cents a share. First Call's survey of four analysts predicted a profit of 31 cents a share for the quarter ended April 30.
Second quarter revenue increased to $54 million, up 118 percent from $24.8 million a year earlier, when Advanced Digital earned $1.9 million, or 20 cents a share. Sales rose 10 percent from the first quarter, with especially strong demand from software and Internet customers, the company said, adding that demand remained healthy from its traditional customers in banking, financial services, manufacturing, research, and government.
At 33 percent, gross margins were about the same as in the first quarter, while operating expenses inched up 2.4 percent. Operating income gained 30 percent sequentially, said Chuck Stonecipher, president and chief operating officer.
Operating expenses will rise over the next quarters as Advanced Digital spends more on research development, and on developing OEM relationships, the company said.
Shares of Advanced Digital were unchanged at 25 in Monday's trading prior to the earnings news. Of 3 analysts polled by Zack's Investment Research, two rate Advanced Digital a "moderate buy", and one maintains the equivalent of a "hold" rating.>