Iomega (NYSE: IOM) expects to report fourth quarter results below analyst expectations.
After market close Friday, the maker of drives for removable storage media said it expects to report fourth quarter earnings of 7 to 9 cents per share, including a 5 cent benefit from a reduction in the company's allowance for deferred tax assets. First Call consensus predicted a profit of 11 cents per share for Iomega's quarter ended Dec. 31.
Fourth quarter revenue ranged between $325 million and $330 million, the company said. Iomega posted sales of $434 million in the third quarter.
The company blamed the fourth quarter shortfall on lower sales of Zip drives and disks, even as marketing costs rose. Iomega's Zip drives are often bundled with PCs, a field which has seen several warnings from manufacturers in recent months as PC sales growth slowed.
"We are taking steps to control costs to adjust to changing market conditions and expect to remain profitable," said Bruce Albertson, president and CEO. "With the new products introduced in the fourth quarter and our newest product announced today, we feel there are good opportunities as we enter 2001."
Shares of Iomega rose 0.19 to 4.05 in Friday's regular trading ahead of the preannouncement.>