Maxtor Turns In Q4 Loss On Declining Sales

Disk drive maker Maxtor reported a worse-than-expected loss for its fourth quarter, on declining revenue -- problems its top officer says are related to a cost structure that is too high.

Revenue for the fourth quarter fell nearly 12 percent to $1.031 billion, compared with $1.17 billion for the same quarter a year earlier. The Milpitas, Calif., company reported a loss of $70.2 million and 28 cents per share, compared with a profit of $39 million for the year-ago quarter.

"While Maxtor's core results were better than we anticipated in December, they continue to reflect an uncompetitive cost and expense structure, primarily on our desktop business,” said C.S. Park, Maxtor’s CEO, in a prepared statement. The company is in the midst of a “100 Day Plan,” Park said, which is focusing on “rationalizing” Maxtor’s product roadmap and cutting costs, among other things.

Park said Maxtor had already eliminated “uncompetitive” programs and boosted what it spends on development of small form-factor disk drives.

Analysts polled by Thomson/First Call had expected Maxtor to turn in a loss of 19 cents per share on revenue of $990 million.

Despite the financial woes, the company said it did not experience inventory backlog in the fourth quarter, during which it shipped 14.7 million units.

Company executives were expected to go into further detail in a conference call with financial analysts later in the day.