Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Galapagos Islands -- Ignore unavailable to you. Want to Upgrade?

To: Jorj X Mckie who wrote (22101)	1/17/2003 7:22:01 PM
From: Challo Jeregy	Respond to of 57110

Suddenly Storage Isn't So Hot By Bill Snyder Staff Reporter 01/17/2003 05:09 PM EST Wasn't enterprise storage supposed to be a hot spot? It didn't take long to cool off. Shares of seven of the major companies in the sector fell an average of 6% Friday, following disappointing earnings by QLogic (QLGC:Nasdaq - news - commentary - research - analysis) earlier in the week, and negative reports by sell-side analysts. Goldman Sachs analyst Laura Conigliaro cut her rating on the enterprise systems and storage sector to cautious from neutral on Friday. And in a scathing note last week, U.S. Bancorp Piper Jaffray analyst Ashok Kumar took the sector to task for "short-sighted, fiefdom-building strategies." He also said the sector is becoming commoditized. "Storage has reached the [same] point as the aircraft industry, where the basic concept of incredibly complex technology is pretty well understood by the critical mass of players and is destined to be exploited as a commodity for ever after," he wrote. "The key to success is building jets that have a lower cost-per-passenger mile. The storage equation is different, but the end result is similar: The only thing that matters now is lowering the cost per GB of storage. That can only mean one thing for storage companies: lower margins for storage products." Leading the downward parade was Storage Tek, which ended down $1.50, or 6%, to $23.50. Storage Tek is scheduled to announce fourth-quarter and full-year 2002 results after the close of trading on Jan. 22. QLogic fell $2.10, or 5.5%, to $36, and Emulex (ELX:NYSE - news - commentary - research - analysis) was down $1.32, or 6.1%, to $20.19. EMC (EMC:NYSE - news - commentary - research - analysis) was off 46 cents, or 6.2%, to $6.87; Brocade (BRCD:Nasdaq - news - commentary - research - analysis) dropped 45 cents, or 8%, to $5.13; McData (MCDT:Nasdaq - news - commentary - research - analysis) was off 12 cents, or 1.4%, to $8.26; and Veritas Software (VRTS:Nasdaq - news - commentary - research - analysis) shed 80 cents, or 4.4%, to $17.47.