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Services Save StorageTek

On the strength of strong services, Storage Technology Corp. (StorageTek) (NYSE: STK) today reported revenues and income far above expectations last quarter.

With product revenue down, StorageTek CEO Pat Martin said the companys concentration on ILM (information lifecycle management)is paying off because its services drive ILM revenues (see StorageTek Outlines ILM Roadmap).

StorageTek reported revenue of $526.5 million and net income of $42.8 million or $0.39 per share, up from $520.3 million and $0.28 earnings per share in the same quarter last year. Analysts forecast revenue of $521 million and $0.32, according to Reuters.

Products revenue from tape and disk fell to $299 million from $312.4 million last year, with service revenue increasing to $227.4 million from $207.8 million.

“Our ILM solution is we go in and sell a customer a tape library, tape drive and disk drive,” Martin told analysts on a conference call. “We’re leading with ILM.”

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