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StorageTek&#039s 2Q loss sends shares south

Storage Technology Corp. (NYSE: STK) shares plunged 3 7/16, or 15 percent, to 19 5/16 Thursday after reporting a second-quarter loss of $38.5 million, or 38 cents a share.

StorageTek, which makes network storage products, absorbed a one-time, pretax charges of $102.6 million related to "pending patent litigation" and restructuring costs.

Excluding the charges, the company earned $27.2 million, or 27 cents a share, on sales of $654.4 million.

First Call consensus pegged it for a profit of 27 cents a share in the quarter.

The $654.4 million in sales represents a 21 percent jump versus the year-ago quarter when it returned a profit of 50 cents a share on sales of $542.3 million.

"Going forward, we anticipate that revenue growth will be accompanied by continued improvements in our costs associated with the restructuring program we initiated earlier this year," said CEO David Weiss in a prepared release.

In the quarter, disk sales fell 10 percent from the year-ago period while tape sales improved 28 percent. Storage services sales grew to $185 million, up 21 percent from the year-ago quarter.

StorageTek shares hit a 52-week high of 41 5/8 in February before falling to a low of 17 1/4 in April.

Five of the 10 analysts following the stock rate it a "hold."

First Call consensus expects it to earn $1.45 a share in the fiscal year. >