SyQuest stock jumps 23%

The portable storage maker, reporting after the market's close, fulfills Wall Street's hopes for narrowed losses.

Dawn Kawamoto Former Staff writer, CNET News
Dawn Kawamoto covered enterprise security and financial news relating to technology for CNET News.
Dawn Kawamoto
2 min read
SyQuest (SYQT), which today saw its share price soar 23 percent prior to its after-market earnings announcement, reported a jump in third-quarter revenues that sliced away at losses.

The portable storage maker, which has been fighting to regain Syquest at a glancelost market share, reported losses of $10.7 million, or 80 cents per share, for the quarter, compared with a net loss of $41.3 million, or $3.61 per share, for the same quarter last year. In the preceding quarter, the company posted a loss of $33.7 million.

Revenues for the third quarter ended June 30 were $31.7 million, compared to $29.5 million in the same period a year ago. SyQuest generated just $16.8 million in the second quarter.

The company, which is fighting to regain market share lost to Iomega (IOM), saw its shares close at 3-1/8, up 19/32 over Friday. The company's shares reached as high as 3-9/32 during morning trading.

Volume of shares traded reached over 8 million, more than eight times SyQuest's average trading volume.

Syquest attributed the improvements to shipments of its new SyJet portable drive during the quarter, and to a reduction in operating expenses.

The company also raised additional money through a $33 million private stock offering in the quarter.

"They're making progress--they were essentially not in business last quarter," said H.D. Brous analyst Howard Rosencrans in a recent interview. "They're on the right track, they're making strides, their products have gotten strong critical response, but it is premature to conclude they're out of the woods."

SyQuest had cited slow sales of its older products and slower-than-expected sales of SyJets as the reasons for last quarter's revenue decline.

"The improved gross profit was partially offset during the quarter by manufacturing start-up costs as we continued to ramp SyJet production to meet the product demand," Ed Marinaro, chairman of the board, said in a statement.