This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Maxtor Swings to a Loss

Updated from 11:21 a.m. EDT

Weighed down by charges, Maxtor (MXO) swung to a loss in the first quarter, and was promptly pummeled by Wall Street.

The hard-drive maker posted revenue of $1.07 billion, up from $1.02 billion a year ago. But charges, including $13.9 million for severance payments to laid-off workers in the U.S. and Singapore and $4.9 million related to the termination of a product line, pushed the company to a GAAP loss of $24.2 million, or 10 cents a share. A year ago, Maxtor posted a profit of $8.9 million, or 3 cents a share.

Analysts polled by Thomson First Call had predicted an 8-cent-a-share loss on revenue of $989.3 million. But Maxtor argues that the pro forma First Call estimates don't include the charges; backing them out, said spokesman Alan Bernheimer, yields a loss of just 2 cents a share, significantly better than consensus.

A check of analyst postings Thursday morning yields a variety of opinions; some analysts agreed with the company and backed out all $18.8 million in charges for a 2-cent loss, while others only backed out the severance charge, yielding a 4-cent loss.

Sell-side analysts were generally positive about the quarter, but a comment by CIBC analyst Matthew Smith illustrates Wall Street's guarded view of the company: "We maintain a cautious stance on MXO shares after 1Q05 results. While we see further margin improvement in 2Q05, a return to full profitability remains a '06 event, in our view," he wrote. CIBC does not have a current investment banking relationship with Maxtor.

In recent trading Thursday, Maxtor shares fell 41 cents, or 8.3%, to $4.56.

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,672.60 -141.38 -0.79%
S&P 500 2,051.82 -11.33 -0.55%
NASDAQ 4,757.8790 +7.4820 0.16%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs