Profit warning zaps Iomega shares

Iomega shares fell $1, or 25 percent, to $3.05 Monday after the disk-drive maker warned that it would miss analysts’ sales and earnings estimates in its fourth quarter.

On Friday, company officials told shareholders to expect sales of between $325 million to $330 million compared to $434 million in the year-ago quarter.

It also said it would post a profit, excluding a one-time tax benefit, of between 2 cents to 4 cents a share.

First Call Corp. consensus was expecting Iomega (NYSE: IOM) to earn 11 cents a share in the quarter.

”We are taking steps to control costs to adjust to changing market conditions and expect to remain profitable,” said CEO Bruce Albertson in a prepared release.

Including a 5-cent-per-share tax benefit, Iomega said earnings per share would be 7 to 9 cents a share.

Iomega, best known for its 100- and 250-megabyte Zip disks and drives which can replace much smaller capacity 3.5 inch floppy disks, is scheduled to announce fourth-quarter results on January 18.

Iomega also announced a higher capacity multi-gigabyte ''Peerless'' drive system which it will begin shipping mid-year. The disks, about the size of personal digital assistants, will come in five, 10 and 20-gigabyte sizes costing $129-$199 each, it said.

Iomega shares moved up to a 52-week high of $7 in November.

One of the two analysts following the stock rates it a “strong buy” while the other calls it a “hold.”