Tuesday, Xyratex Ltd. (XRTX), a provider of data storage subsystems and storage process technology, reported a profit for the fourth quarter compared to a loss in the year-ago period, helped mainly by the absence of charges that impacted previous year results.
According to the company, GAAP net income for the quarter was $1.6 million or $0.05 per share, compared with a GAAP net loss of $55.7 million or $1.92 per share in the year-ago period.
On a non-GAAP basis, the company's net income increased to $7.88 million or $0.26 per share from $0.447 million or $0.02 per share in the year-ago period.
On average, five analysts polled by Thomson Reuters estimated earnings of $0.38 per share. Analysts' estimates typically exclude special items.
The company's total revenue for the quarter declined by 14.9% to $242.97 million from $285.42 million in the comparable period a year-ago. Five Wall Street analysts estimated revenues of $262.82 million for the quarter.
Revenues from sales of Networked Storage Solutions products declined by 8.5% to $203.4 million from $222.3 million in the same quarter a year ago, while revenues from sales of Storage Infrastructure products declined by 37.4% to $39.5 million from $63.1 million in the same quarter a year ago.
Gross profit margin in the fourth quarter was 15.6%, compared to 12.5% in the same period last year. Cost of revenues declined to $205.01 million from $249.82 million for the quarter, while total operating expenses, which include research and development expenses, selling, general and administrative expenses, amortization of intangible assets, the impairment of goodwill and restructuring costs declined to $33.21 million from $74.18 million in the year-ago period.
According to the company, 2008 fourth quarter and full year results included some significant non-recurring charges related to the deterioration in the macroeconomic climate in that quarter. GAAP net loss and non-GAAP net income included additional inventory and vendor claim provisions totaling approximately $7 million. These charges reduced the NSS gross profit margin in the fourth quarter of fiscal 2008 by 3.2%. GAAP net loss also included non-cash charges totaling approximately $54 million, being an impairment of goodwill and a valuation allowance against the deferred tax asset.
For the entire year, the GAAP net loss was $16.41 million or $0.56 per share, compared with a GAAP net loss of $47.9 million or $1.0 per share in the year-ago period. On a non-GAAP basis, the net income decreased to $1.5 million or $0.50 per share, compared with $16.2 million or $0.54 per share a year-ago. Year-to-date revenue declined by 17.3% to $867.9 million from $1.05 billion for fiscal year 2008.
For the first quarter of 2010, the company anticipates earnings on a GAAP basis to be in the range of $0.24 to $0.52 per share . On a non-GAAP basis, earnings per share is anticipated to be in the range of $0.32 to $0.60. Five Wall Street analysts estimate earnings of $0.08 per share for the first quarter.
Revenue in the first quarter of 2010 is projected to be in the range $245 million to $285 million. Street estimates revenue of $231.07 million.
XRTX closed Tuesday's last trade at $15.25, up $0.84 or 5.83% on a volume of 1.4 million shares on the Nasdaq. In the after hours the stock traded down $0.75 or 4.92%.
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