Data storage device maker STEC, Inc. (STEC), Tuesday reported a slip to loss in the first quarter, hurt mainly by a steep decline in revenue and margins. Loss for the quarter was more than what analysts expected, while revenue was above estimates. Looking ahead to the second quarter, STEC detailed a weak outlook citing a trough period.
STEC shares plunged over 13 percent in extended trade on the Nasdaq, following the announcement of its financial results.
STEC makes enterprise-class solid-state drives, flash cards, and flash modules. The company's revenue for the first quarter plunged about 47 percent from last year.
Gross margin for the quarter dropped to 35.9 percent from 42.4 percent last year. Operating margin was a negative 27.5 percent, compared to a positive 16 percent last year, hurt by higher research and selling expenses.
Santa Ana, California-based STEC reported first-quarter net loss of $10.7 million or $0.23 per share, compared to net income of $14 million or $0.27 per share last year.
Excluding items, loss for the quarter was $7.9 million or $0.17 per share, compared to earnings of $16.8 million or $0.32 per share a year ago.
On average, 12 analysts polled by Thomson Reuters expected a loss of $0.15 per share for the quarter. Analysts' estimates typically exclude special items.
Revenue for the quarter was $50.4 million, compared to $95 million a year ago. Analysts expected revenue of $49.94 million.
STEC expects second-quarter adjusted loss of $0.28 to $0.26 per share and revenue of $40 million to $42 million. Analysts currently expect a loss of $0.13 per share with revenue of $51.63 million.
STEC said it anticipates few customers to qualify some of its products this quarter, with several others expected to be completed in the third quarter 2012.
STEC closed Tuesday on the Nasdaq at $7.70, down $0.34 or 4.23%, on a volume of over 1 million shares. In after hours, the stock further dropped $1.06 or $13.77%.
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