Adaptec Slips on Revenue Shortfall - TheStreet

Data storage company

Adaptec

(ADPT) - Get Report

said Wednesday that it expects first-quarter revenue to come in below forecasts, but added that it will also record a $49.3 million gain from a settlement.

"Our expectation for a strong business upturn in June failed to materialize as continuing economic uncertainty created unusually difficult selling conditions worldwide," said Robert N. Stephens, chief executive. "At the same time, we continue to closely manage operations and spending and we expect results will be in line with our projections."

Shares of the company were recently down 10.7% at $7.54.

Adaptec now expects revenue of $107 million, down from the company's original expectation of $115 million to $120 million. Analysts expect $117.2 million. The company had sales of $107.9 million in the year-ago period.

The gain will result from the May settlement with the former president of Distributed Processing Technology, which Adaptec acquired in 1999. The company also said it expects earnings "in the middle of the range" given in April. At the time, the company said it would earn 2 cents to 4 cents a share, before items.

Analysts expect the company to earn 3 cents a share in the first quarter. Adaptec earned 8 cents a share in the same quarter last year. The Milpitas, Calif., company will release results on July 28.