Storage Bytes: Earnings And More Earnings

In a testimony to the strength of the storage recovery, and to the continuing security of my position at CRN writing about storage, 10 vendors and one storage solution provider reported earnings this week.

Most were positive, a few were records and two were final curtain calls from companies scheduled to be acquired this quarter.

All were way too long to read in a single sitting, so here they are in summary form.

Company: Veritas Software

Period: Third quarter ended Sept. 30

Revenue: $451 million, compared with $366 million last year

Earnings: $77.6 million, or 18 cents per share, compared with $36.2 million, or 9 cents per share, last year

Expectations: Fourth-quarter revenue of $480 million to $490 million, earnings of 21 cents to 23 cents per share

My take: Veritas is the No. 2 storage management software vendor, or No. 1 if you take out competitors with hardware. The company needs all the earnings it can get to build a war chest to survive the coming software assault from an invigorated EMC.

Company: Emulex

Period: First quarter ended Sept. 28

Revenue: $84.6 million, compared with $70.4 million last year

Earnings: $22.6 million, or 27 cents per share, compared with $32 million, or 39 cents per share, last year

Expectations: Fourth-quarter revenue of $90 million to $93 million, assuming its acquisition of Vixel is complete

My take: It will be fun to watch the company as it continues to focus more on the embedded storage business with its acquisition of Vixel.

Company: Western Digital

Period: First quarter ended Sept. 26

Revenue: $714 million, compared with $583 million last year

Earnings: $5 million, or 2 cents per share, compared with $22 million, or 11 cents per share, last year

My take: Income would have been $53 million for the quarter if it hadn't acquired head maker Read-Rite. Back in the old days, a lot of companies would have bragged about that pro-forma figure as its earnings. Of course, most of those companies are kaput. Note that revenue grew 23 percent, but volume grew 31 percent, which says a lot about the per-unit price of a hard drive. Can you hear the whistling sound of a bomb falling?

Company: Quantum

Period: Second quarter ended Sept. 28

Revenue: $195 million, compared with $204 million last year

Earnings: Lost $38 million, or 22 cents per share, compared with $111 million, or 59 cents per share, last year

Expectations: Third-quarter revenue to be flat, not yet sure of earnings because of planned "structural changes." Do you smell a layoff coming?

My take: The company blamed the downturn on falling tape prices. We'll see what happens when the new SDLT 600 drives start shipping this quarter.

On Wednesday, a few other reported.

Company: JNI

Period: Third quarter ended Sept. 30

Revenue: $6 million, compared with $7.1 million last year

Earnings: Lost $8.5 million, or 31 cents per share, compared with a loss of $6 million, or 22 cents per share, last year

Expectations: None. Not much to say when your company probably won't be reporting next quarter.

My take: Could be the last report for JNI, as it is slated to be acquired by Applied Micro. But then again, there is that nasty shareholder lawsuit to contend with.

Company: Overland Storage

Time: First quarter ended Sept. 30

Revenue: $56.6 million, compared with $34.5 million last year

Earnings: $2.2 million, or 16 cents per share, compared with a loss of $577,000, or 5 cents per share, last year

Expectations: Second-quarter revenue of $60 million, earnings of 20 cents per share

My take: Figures don't yet include the acquisition of Okapi, the iSCSI and disk-to-disk-to-tape backup developer.

Company: Dot Hill Systems

Time: Third quarter ended Sept. 30

Revenue: $51 million, compared with $8.6 million last year

Earnings: $3.8 million, or 10 cents per share, compared with a loss of $7.3 million, or 29 cents per share, last year

Expectations: Fourth-quarter revenue of $55 million, earnings of 11 cents per share

My take: With all the bad press about Sun, its main OEM, lets hope Dot Hill keeps building its channel.

These folks had the following to say on Tuesday.

Company: Storage Technology (StorageTek)

Period: Third quarter ended Sept. 26

Revenue: $520.3 million, compared with $501.7 million last year

Earnings: $31 million, or 28 cents per share, compared with $23.9 million, or 22 cents, last year

Expectations: Didn't say.

My take: In his canned quote, Chairman, President and CEO Patrick Martin mentioned "Information Lifecycle Management." StorageTek is trying to copyright that phrase. Tough job. Other vendors claim prior use. Shades of Al Gore inventing the Internet?

Company: Seagate Technology

Time: First quarter ended Oct. 3

Revenue: $1.74 billion, compared with $1.58 billion last year

Earnings: $198 million, or 40 cents per share, compared with $110 million, or 24 cents per share, last year

Expectations: Didn't say.

My take: Let's see: Number of drives shipped up 27 percent from last year. Revenue up only 10 percent. But earnings up 80 percent. Must be doing something right. Now if the SEC would only close its investigation.

Company: Vixel

Time: Third quarter ended Sept. 28

Revenue: $6.4 million, compared with $5 million last year

Earnings: Lost $2.4 million, or 16 cents per share, compared with a loss of $2.6 million, or 11 cents pe share, last year

Expectations: What's the point? Some time next month, it should be part of Emulex.

My take: A couple of years ago, Vixel sold its software division to Fujitsu Softek. Now its embedded business is going to Emulex. There's nothing left to sell, so goodbye, Vixel. It's been good knowing you.

And on Monday, DataLink, the Minneapolis-based storage solution provider, reported.

Company: DataLink

Time: Third quarter ended Sept. 30

Revenue: $20 million, compared with $21.9 million last year

Earnings: Lost $2 million, or 20 cents per share, compared with a loss of $962,000, or 9 cents per share, last year

Expectations: Declined to say.

My take: The company will probably take a big hit due to severance pay and office closings. This quarter, DataLink cut head count to 132 employees, down from 157. The company also closed four offices, leaving it with 14.