This was posted earlier, Dow Jones Newswires -- December 18, 1997
but i thought it might get lost in all the post. (bold added)
Iomega Down 9.4% On New Jaz Delay; 4Q Views Intact
By Christopher Grimes
NEW YORK (Dow Jones)--Iomega Corp. (IOM) is postponing the
release date of its new Jaz drive until next quarter, but analysts downplayed
the delay as having little impact on the company's earnings.
The new two-gigabite Jaz drives were originally expected to be released in
the fourth quarter, but Iomega said Thursday morning that the product
needed more testing and wouldn't be shipped until the first quarter.
Iomega shares fell on the news, dropping 2 1/2, or 9.4%, to 24.
Iomega has had product snafus in the past, including a product recall back in
April, that may be causing it to be more careful in the testing process now,
said Joseph Besecker, an analyst at Emerald Research.
"They may have put this product out two years ago" without testing as
extensively, Besecker said. "But then they were in a mode where they were
being the aggressor. Now they're on top and they have to careful not to
leave a door open for the people behind them."
A company spokeswoman said the delay was based on an "internal quality
testing" decision.
"We would prefer not to ship a product before it's met all of our internal
quality standards," said Susan Stillings, director of investor relations. "We
had planned on revenue (from the two-gigabite drive) in the fourth quarter
and we're disappointed that we didn't ship it."
Still, Besecker said he hadn't worked any revenue from the new product
into his estimates for Iomega's fourth quarter, and not much into his
estimates for the first quarter.
Neither had Howard Rosencrans, an analyst at HD Brous & Co..
Rosencrans said he expects Iomega to earn 34 cents a share in the fourth
quarter.
The mean estimate of analysts, according to First Call Inc., is 30 cents a
share; in the fourth quarter of 1996, Iomega earned 19 cents a share.
Among those pursuing Iomega in the removable storage business are
Syquest Technology Inc. (SYQT) and Sony Corp. (SNE), which is said to
be working on a competing product. |
