Storage Bytes: Cheers For The Storage Sector
The storage industry has seen pretty good times of late. Over the course of nearly a week, a dozen storage vendors posted revenue and earnings numbers for the closing quarter of 2002 that, in total, made it seem as if someone plugged the hole in the Titanic.
Why did the quarter look so good, despite IDC estimates that external storage spending fell nearly 24 percent in 2002? Several solution providers told me that customers opened their purses at the end of the year in a very conservative attempt to spend at least part of their budgets. They also said spending on disaster recovery and business continuity increased. Unfortunately, that spending spurt didn't happen earlier in the year.
Of course, it's easy for many storage companies to look good now, considering the sector's dismal showing in the last calendar quarter of 2001. As an analogy, I could brag that I lost 20 pounds since December 2001, but in the end I'm still fa- fa- fa- overweight.
But hey, why quibble with technicalities. Join the celebration!
Western Digital sold 10.3 million hard drives and posted about $750 million in revenue and $75 million in earnings for its fiscal second quarter, compared with sales of 7.7 million drives sold, $575 million in sales and $12.6 million in earnings a year earlier. Also of note: The company saw a $5 rise in the average selling price per unit, which climbed to $73. Yippee!
Adaptec's third quarter revenue hit $109 million, up from $105 million a year ago. While the company didn't make money, at least it lost only $3.5 million, down from $10.8 million last year. Yay!
McData's fourth-quarter sales rose to $106 million from $93 million the year before. The company made about $8.6 million in the quarter vs. a loss of $6 million last year. And given EMC's difficulties in the past year or two, McData must be glad that EMC accounts for only 54 percent of its revenue, compared with 56 percent in the previous quarter. Wahoo!
Speaking of EMC, the storage giant reported fourth-quarter revenue of $1.5 billion, up about 18 percent from $1.3 billion a year ago. Now, it's true that EMC lost $64 million in the quarter, but that was less than the $70 million it lost last year. Joy!
Emulex managed to pull in sales of $76 million in its second quarter, up from $62 million last year. Earnings for the quarter were $15.5 million, way up from a loss of more than $28 million the year before. Yee-ha!
StorageTek's fourth-quarter revenue rose to $590 million, a hefty gain from $566 million the year before. Profits also soared to $61.6 million, up from the $40 million last year. Rah, rah, rah!
Imation saw its fourth-quarter sales slip to $271 million from $300 million a year earlier. But the company earned $21 million, compared with a loss of $22.9 million in the year-ago quarter. Oh, baby!
Second-quarter revenue at Overland Storage climbed to $49 million from $46 million the year before, but earnings dipped to $1.5 million from $2 million during that time. And Veritas enjoyed record fourth-quarter sales of $405 million, compared with $374 million a year ago, and cut its loss for the quarter to $49 million from $202 million a year ago. We'll invite those two to the party anyway. Yoo-hoo!
Yoo-hoo? Sorry, I'm running out of synonyms for yippee. But the word is in my spell checker, so it's OK.
However, things also weren't very rosy at Quantum, despite the addition of Benchmark Innovations, acquired in November. Quantum's third-quarter sales sank to $229 million from $268 million a year earlier, and the company lost $15.5 million in the quarter, compared with a profit of $592,000 the year before. FalconStor's fourth-quarter revenue inched up $3.4 million from $3 million the year before, but the sales gain was tarnished by a loss of about $2.9 million, bigger than the year-ago loss of $1.3 million. And Dot Hill saw its fourth-quarter loss swell to $12.4 million from $5.7 million a year earlier, even though revenue increased to $16.3 million from $10.5 million during that time span.
Reality check. Ouch.
OK, so it might be blind optimism to paint a colorful picture for the entire industry based on a snapshot of the latest financial results. If so, hand me my white-tipped cane and dark sunglasses, turn the music on and start the party before we get too far into this quarter.
Still Reading and Writing,
Joseph F. Kovar
Joe Kovar is the storage editor for CRN