Storage giant Maxtor ( MXO) said consumer appetites for bigger hard drives will help it post better-than-expected revenue and a pro forma profit in the current fourth quarter. The company also said it is cutting 500 positions.

The bullish forecast comes two days before industry leader Seagate Technologies is set to sell a billion-dollar initial offering to the public following two years as a private company owned by buyout firms and its management.

Milpitas, Calif.-based Maxtor said fourth-quarter revenue will be $990 million to $1.03 billion, compared with analysts' average estimate of $966 million, as compiled by Thomson Financial/First Call. The company expects to lose between $43 million and $53 million using standard accounting. Excluding intangibles amortization and severance charges, the company expects to turn a pro forma profit of $25 million to $35 million, or 10 cents to 14 cents a share. The First Call consensus, which excludes amortization, is for a loss of 5 cents a share.

Maxtor, the No. 3 disk drive maker behind Seagate and Western Digital ( WDC), attributed the results to success in ramping up new 60- and 80-gigabyte disks, strong demand for desktop and server hard disk drives, and a favorable pricing environment.

Despite the higher guidance, the company said it's in the process of cutting 500 positions in the U.S., a move that will have "minimal benefit in the fourth quarter, but will provide significant expense reduction in the quarters ahead."

Seagate is hoping to sell 17.5% of its shares at $13 to $15 each in a deal led by Morgan Stanley and Salomon Smith Barney. The proposed ticker is STX.