StorageTek To Restructure In Wake Of Lower-Than-Expected Earnings - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.


StorageTek To Restructure In Wake Of Lower-Than-Expected Earnings

Storage Technology Corp. today reported third-quarter earnings that were well below Wall Street expectations. In addition, the company said it would cut 1,500 to 1,700 jobs as part of a restructuring to be completed by the second quarter of next year.

The company revealed last week that its third-quarter earnings would be less than 10 cents per share. Analysts had projected 30 to 33 cents a share, but then quickly revised the estimate to 8 cents per share.

Today, however, StorageTek, as it is more commonly known, reported third-quarter earnings of 5 cents a share, or $4.7 million, before one-time charges. Including one-time charges, the company reported a loss of $32.4 million, or 16 cents a diluted share. This compares to earnings of $50.6 million, or 48 cents per share, in the same period last year.

Revenue for the quarter was $573.7 million, up less than 1 percent from $571.1 million year over year.

StorageTek president and CEO David Weiss says the company's performance was affected by poor revenue growth and disappointing margins in its consulting and integration services businesses.

StorageTek expects to save approximately $150 million annually by trimming its workforce. Last week, StorageTek announced it had hired investment bankers to help it explore strategic alternatives, including the sale of the company. But financial analysts predicted the company would more likely restructure or partner with another company to revive its flagging business.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
State of the Cloud
State of the Cloud
Cloud has drastically changed how IT organizations consume and deploy services in the digital age. This research report will delve into public, private and hybrid cloud adoption trends, with a special focus on infrastructure as a service and its role in the enterprise. Find out the challenges organizations are experiencing, and the technologies and strategies they are using to manage and mitigate those challenges today.
Who Should Own RPA?
Lisa Morgan, Freelance Writer,  2/18/2020
IT Salary Report 2020: Get Paid What You Are Worth
Jessica Davis, Senior Editor, Enterprise Apps,  2/12/2020
10 Analytics and AI Startups You Should Know About
Cynthia Harvey, Freelance Journalist, InformationWeek,  2/19/2020
Register for InformationWeek Newsletters
Current Issue
IT Careers: Tech Drives Constant Change
Advances in information technology and management concepts mean that IT professionals must update their skill sets, even their career goals on an almost yearly basis. In this IT Trend Report, experts share advice on how IT pros can keep up with this every-changing job market. Read it today!
White Papers
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Sponsored Video
Flash Poll