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Technology Stocks : Disk Drive Sector Discussion Forum -- Ignore unavailable to you. Want to Upgrade?

To: All Mtn Ski who wrote (9017)	1/24/2001 8:38:47 PM
From: LK2	Read Replies (1) \| Respond to of 9256

MXTR reports Q4 above estimates, but warns that lowered PC demand could hurt the next quarter's results. For Personal Use Only >>>>> biz.yahoo.com Wednesday January 24, 2001 7:27 pm Eastern Time Maxtor hard drive maker says profit up, sees pressure (UPDATE: adds details from conference call, share price, adds byline) By Peter Henderson MILPITAS, Calif., Jan 24 (Reuters) - Computer disk drive maker Maxtor Corp.(NasdaqNM:MXTR - news) reported on Wednesday fourth quarter earnings that blasted past Wall Street targets as the industry, facing component shortages, raised product prices. But the company is preparing for a first quarter that could show a loss because of weakness in demand for personal computers, executives said, holding out the hope that the consolidating industry would manage to control production and avoid a price war. Net income, including a $7.7 million pre-tax charge for settling a legal dispute, rose to $5.0 million, or 4 cents per diluted share, from $3.99 million, or 3 cents per share. Excluding the charge, earnings in the fourth quarter were $12.1 million and diluted earnings per share were $0.10, which compared with analysts' consensus estimate, as reported by First Call/Thomson Financial research, of no per share earnings. Revenues for the firm, which is in the process of taking over the disk drive operations of Quantum Corp-HDD (NYSE:HDD - news), rose to $727.2 million from $690.6 million in the quarter year ago. Maxtor shares eased in after-hours trade, dropping to $7-13/6 on the Instinet system after closing at $8-23/64, up nearly nine percent, on Nasdaq before results were announced. ``The fourth quarter was characterized by unseasonably soft demand for PCs. However, for the hard disk drive industry, various component shortages resulted in a supply constrained market,'' President and Chief Executive Mike Cannon said in a conference call for analaysts. ``We were able to rapidly ramp up production of new products, especially the 20 GB (gigabyte) per disk configuration; we managed the supply chain effectively; and we were able to meet customer requirements while improving asset utilization,'' he added in a statement. Maxtor projected first quarter results ranging from breaking even down to a $6 million loss, or break-even to a five cent loss per share, Chief Financial Officer Paul Tufano said. Revenues would be $655-675 million and the gross profit margin would be in the mid-13 percent range, he said. ``The biggest factor influencing our outlook for the first quarter is a lowered demand forecasted by all major PC manufacturers,'' CEO Cannon commented in the call. ``We are responding to this at Maxtor by lowering our build schedules accordingly.'' Cannon, who said Maxtor expected to finish the takeover of Quantum by late March or early April, helping to consolidate the industry, left open the question of whether the sector would fight a new price war. ``If the drive industry as a whole responds to this lowered demand environment with a proportional reduction in supply, I believe the industry can avoid the debilitating levels of price reduction experienced through most of last year.'' At the close on Nasdaq, Maxtor had outperformed the the American Stock Exchange computer hardware index (^HWI - news) by more than 60 percent percent since the end of 1999. Copyright 2001 Reuters Limited. >>>>>