StorageTek Q2 profit up 55%

LOUISVILLE, Colorado: Computer tape and disk storage maker Storage Technology Corp. has reported a 55% rise in its Q2 net profit despite falling revenue, saying cost cutting was paying off. Chief Executive Pat said he was comfortable with Wall Street estimates for the current, third quarter, but narrowed his outlook to the low end of previous earnings guidance since the hoped for rise in technology spending has fizzled so far.

Louisville, Colorado-based StorageTek reported a profit of $19.1 million, or 18 cents per diluted share in the second quarter, up from $12.3 million, or 12 cents per share a year earlier. Revenue slid to $491.9 million from $512.1 million, it said.

Analysts polled by Multex had forecast earnings within a range of 15 cents to 21 cents per share with the consensus a 17% profit on revenue of $509 million. "I think we've got another 2-4 quarters of where we see the storage business is still going to struggle," Chairman and Chief Executive Patrick Martin said in a telephone interview.

He saw revenue for the year flat to slightly down on 2001 and an increase in earnings if 30 percent, the low end of his previous range of 30-45 percent growth. Martin said he was comfortable with analyst expectations for the quarter, which according to Thomson First Call are earnings of 20 cents per share.

Chief Financial Officer Robert Kocol in a statement credited cost cutting initiatives and financial discipline for earnings strength. The company has been actively cutting costs since 2000, when it restructured and cut hundreds of jobs. Shares of StorageTek fell 3 percent to $13.56 during regular trade on the New York Stock Exchange.

© Reuters