Rande Is IOM
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Friday January 22 3:30 AM ET
Iomega Reverses Loss Trend With Quarterly
Profit
ROY, Utah (Reuters) - Iomega Corp. (NYSE:IOM - news), maker of the high
storage-capacity Zip disk drive, Thursday posted a $19 million profit, reversing a
trend of losses for the last three quarters, although the results were 47 percent below
the previous-year period.
The Roy, Utah-based data storage company said earnings amounted to 7 cents a
share, compared with $36.1 million, or 13 cents a share, in the fourth quarter of
1997. Analysts had been expecting Iomega to earn 5 cents a share, according to First
Call Corp.
Revenue fell 8 percent from the year-ago period to $501 million, as growth in sales
centered on disks for Iomega's Zip and Jaz drives, rather than the drives themselves.
Zip and Jaz disk shipments increased 47 percent compared with the 1997 fourth
quarter, while shipments of Zip drive units increased 26 percent and Jaz drive
shipments fell 7 percent.
Total revenue from Zip products was $353 million and total Jaz revenue was $123
million in the quarter. Iomega also began to ship its Clik! Digital Camera product
during December, a move that barely affected fourth-quarter revenue, Iomega said.
For 1998, Iomega lost $54 million, or 20 cents a share, on revenue of $1.7 billion.
That compares with 1997 earnings of $115 million, or 42 cents a share, on sales of
$1.7 billion. The company said part of its return to profitability in the fourth quarter
was due to improvements in gross margin, or sales minus the cost of the products
sold.
Jodie Glore, Iomega's chief executive, said the company generated over $100 million
in cash flow, reduced inventory, and strengthened its balance sheet in the fourth
quarter. She said the company expects to break even in the first quarter of 1999, with
a possible small profit or loss.
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