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.