COMMENT: Storage bytes bigger

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Ten vendors and one storage reseller reported earnings in the US last week. Most were positive, a few were records and two were final curtain calls from companies to be acquired this quarter.

 

Veritas Software, for its third quarter ended September 30, earned  US$451 million in revenue, compared to US$366 million last year. Profits came to US$77.6 million or 18 cents per share, compared to US$36.2 million or 9 cents last year. Veritas is predicting fourth quarter revenue of US$480 million to US$490 million and earnings of 21 cents to 23 cents per share.

 

My take: Veritas is the number two storage management software vendor, or number one if you take out competitors with hardware. The company needs all the earnings it can get to build a war chest to survive the coming software assault from an invigorated EMC.

 

Emulex, for its first quarter ended September 28, earned US$84.6 million, compared to US$70.4 million last year. Profits came to US$22.6 million or 27 cents per share, compared to US$32 million or 39 cents last year. Emulex predicts fourth quarter revenue of US$90 million to US$93 million, assuming its acquisition of Vixel is completed.

 

My take: It will be fun to watch the company as it continues to focus more on the embedded storage business with its acquistion of Vixel.

 

Western Digital, for its first quarter ended September 26, earned US$714 million in revenue, compared to US$583 million last year. Profits came to US $5 million or 2 cents per share, compared to US$22 million or 11 cents last year.

 

My take: Income would have been US$53 million for the quarter if it hadn't acquired head maker Read-Rite. Back in the old days, a lot of companies would have bragged about that pro-forma figure as its earnings. Of course, most of those companies are kaput. Note that revenue grew 23 percent, but volume grew 31 percent, which says a lot about the per-unit price of a hard drive. Can you hear the whistling sound of a bomb falling?

 

Quantum, for its second quarter ended September 28, earned US$195 million, compared to US$204 million last year. The company lost US$38 million or 22 cents per share, compared to US$111 million or 59 cents last year. The company has said it expects third quarter revenue to be flat and is not yet sure of earnings because of planned 'structural changes'.

 

My take: Do you smell a layoff coming? The company blamed the downturn on falling tape prices. We'll see what happens when the new SDLT 600 drives start shipping this quarter.

 

On 22 October, a few other storage vendors announced results.

 

 JNI, for its third quarter ended September 30, earned US $6 million in revenue, compared to US$7.1 million last year. It lost US$8.5 million or 31 cents per share, compared to a loss of US $6.0 million or 22 cents last year.

 

My take: Could be the last report for JNI, which is slated to be acquired by Applied Micro. But then again, there is that nasty shareholder lawsuit with which to contend.

 

Overland Storage, for its first quarter ended September 30, reported US $56.6 million in revenue, compared to US $34.5 million last year.It claimed to have profited US $2.2 million or 16 cents per share, compared to a loss of US $577,000 or 5 cents last year. The company expects second quarter revenue of US $60 million with earnings of 20 cents per share.

 

My take: Figures don't yet include the acquisition of Okapi, the iSCSI and disk-to-disk-to-tape backup developer.

 

Dot Hill Systems, for its third quarter ended September 30, earned US $51 million in revenue, compared to US $8.6 million last year. Profits came to US $3.8 million or 10 cents per share, compared to a loss of US $7.3 million or 29 cents last year. The company expects fourth quarter revenue of US $55 million and earnings of 11 cents per share.

 

My take: With all the bad press about Sun, its main OEM, lets hope Dot Hill keeps building its channel.

 

These vendors had the following to say on Tuesday, 21 October.

 

Storage Technology (StorageTek), for its third quarter ended September 26, reported US $520.3 million in revenue, compared to US $501.7 million last year. Profits came to US $31.0 million or 28 cents per share, compared to US $23.9 million or 22 cents last year.

 

My take: In his canned quote, chairman, president and CEO Patrick Martin mentioned information lifecycle management. StorageTek is trying to copyright that term. Tough job. Other vendors claim prior use.

 

Seagate Technology, for its first quarter ended October 3, it earned revenue of US $1.74 billion, compared to US $1.58 billion last year. Profits came to US $198 million or 40 cents per share, compared to US $110 million or 24 cents last year.

 

My take: Let's see: Number of drives shipped up 27 percent from last year. Revenue up only 10 percent. But earnings up 80 percent. Must be doing something right. We'll have to see what comes out of the analyst reports for which SEC recently asked Seagate.

 

Vixel, for its third quarter ended September 28, earned US $6.4 million, compared to US $5 million last year. The company lost US $2.4 million or 16 cents per share, compared to a loss of US $2.6 million or 11 cents last year.

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