Wednesday, Xyratex Ltd (XRTX), a data storage solutions and storage process technology provider, reported a profit for the third quarter, flat with last year, notwithstanding lower gross margins and a 12% decline in revenues. Earnings for the quarter came in well ahead of analysts' consensus. Xyratex shares surged over 10% following the news on the Nasdaq.
Xyratex reported third quarter net income of $7.81 million or $0.26 per share, flat with last year. Results for the quarter include amortization charges of $1.01 million, equity compensation charges of $1.39 million and restructuring costs of $513 thousand.
On an adjusted basis, net income was $10.73 million or $0.36 per share, compared to $10.76 million or $0.36 per share a year earlier.
On average, five analysts polled by Thomson Reuters expected the company to report earnings of $0.14 per share for the quarter. Analysts' estimates typically exclude special items.
Total revenues for the quarter declined 12.3% to $246.29 million from $280.78 million a year ago, yet topped the analysts' revenue estimate of $239.17 million.
Network Storage Solutions revenue declined to $208.61 million from $213.10 million in the previous year. Revenue from Storage Infrastructure declined to $37.69 million from $67.68 million last year.
Gross profit margin in the third quarter was 16.7%, compared to 17.6% in the same period last year.
Total operating expenses declined to $33.03 million from $40.45 million in the previous year.
Provision for income taxes for the quarter was $0.41 million, compared to $1.41 million a year ago.
For the nine-month period, net loss was $17.96 million or $0.61 per share, compared to an income of $7.84 million or $0.26 per share in the same period of the previous year. Total revenues for the period declined to $624.92 million from $764.29 million last year.
XRTX closed Wednesday's regular trading at $9.51, up 0.31 or 3.37%, on a volume of 796K shares on the Nasdaq. In after hours, the stock further gained 0.89 or 9.36%, trading at $10.40.
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