Datalink Reports Decline In 2Q Revenue, Earnings

Storage VAR Datalink on Thursday said its second quarter revenue and earnings both fell compared to last year as customers carefully scrutinized every deal before signing.

Datalink, one of the few midrange solution providers to be publicly listed, said that the quarter was a challenging one in terms of customers' IT spending, but that things should look better in the second half of the year.

Datalink said that revenue for its second quarter, which ended June 30, was $43.7 million, down about 12 percent from the $49.7 million reported during the second quarter of 2008.

Earnings during the quarter fell even further. The company reported earnings of $238,000, or 2 cents per share, down 76 percent from the $979,000 it reported last year.

The demand for storage solutions was slightly higher in the second quarter than in the first quarter, but customers are scrutinizing deals carefully and delaying larger implementations where possible to conserve cash in an uncertain environment, said Charlie Westling, Datalink president and CEO, in a statement.

"Against the backdrop of continuing economic challenges as we head into the third quarter of 2009, we plan to continue to focus on growing market share, managing our cost structures efficiently and expanding our services offerings to deliver more value to our customers," Westling said in that statement.

Looking forward, Datalink said it is cautiously optimistic that customer storage spending levels, while still slowing in the third quarter, should improve during the entire second half of 2009.

As a result, Datalink expects revenue for the third quarter to be between $41 million and $45 million, down from $50 million in last year's third quarter, with earnings ranging from a loss of 1 cent per share to a profit of 4 cents per share, compared to 8 cents per share of profit last year.

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