After warning last week that it would
post a fourth-quarter loss,
delivered it on Thursday and said it expected another loss for the first quarter.
Investors, who until last week had been expecting a profit, showed little initial reaction to the results, and the data storage equipment maker's shares fell 3/8, or 3%, to 11 7/8 in midmorning trading. (Shares closed up 13/16, or 7%, at 13 1/16.)
Storagetek, as the company is commonly known, reported a net loss of $25.8 million, or 26 cents a diluted share, in the quarter ended Dec. 31. That compares with net income of $52.6 million, or 52 cents a share, in the fourth quarter of 1998.
Excluding a variety of one-time charges, including those for restructuring and litigation, Storagetek posted a loss of 10 cents a share in the latest quarter, in line with revised expectations. Prior to the company's warning last week, analysts surveyed by
First Call/Thomson Financial
had been expecting a profit of 5 cents a share.
The company said it expected a loss in the first quarter as it continues implementing its restructuring plan.
Following the announcement last week, Storagetek's chief executive, David Weiss, and the chief operating officer, Victor Perez, resigned at the tail end of a chain of disappointing quarters and the loss of its long-time alliance with
"The first half of 2000 will be challenging, and we are anticipating a loss from operations in the first quarter,'' said Robert Kocol, chief financial officer of the Louisville, Colo.-based company, in a statement. "However, as our restructuring plans are implemented, our quarterly revenues grow throughout the year, and further savings are realized, we expect to return to profitability."
Revenues for the quarter dropped 5% to $622.6 million from $660 million a year earlier.
"We have determined that the strategic alternative that best builds shareholder value under current market conditions is to operate as a more efficient, more flexible, more focused independent company,'' Weiss said in the statement last week.
Storagetek shares have lost more than two-thirds of their value in the last 12 months.