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Storage Financials Take a Dip: Page 2 of 3

"We remain cautious on the storage sector in the near term, given weaker than expected results from Seagate and Emulex, and ho-hum results from EMC," Wedbush Morgan Securities analyst Craig Berger wrote today in a note to clients. (See EMC Hiccups, Waits for Clariion.) "In total, we think Q1 and Q2 storage dynamics are shaping up to be in-line to slightly weaker than expected, though not a disaster."

  • LSI Logic's revenue of $476 million was up 6 percent from last year and down 6 percent from last quarter. CEO Abhi Talwalkar said LSI's Engenio storage systems division had strong sales of 4-Gbit/s midrange SAN systems, and has sold 3,000 since they started shipping last June through IBM and others. (See IBM Drives 4-Gbit/s.) But while Engenio revenue was up 22 percent from last year, it was down 12 percent from last quarter.
  • Overland Storage lost $6 million or $0.44 per share, compared to net income of $2 million and $0.14 EPS a year ago.

    "I'm not satisfied with the results," Overland CEO Chris Calisi said. "From what we heard, it was an industry-wide issue and we have not been able to identify any of the causes."
    Last year HP said it would stop shipping a tape library it OEMed from Overland. (See Overland Loses HP OEM Deal.) Considering HP accounted for most of Overland sales this accelerated Overland's plans to get more into disk-based backup and data protection software.

    Now Calisi says his forecast that HP revenue would be almost gone by the end of this year was "overly pessimistic," and he expects revenue from HP to decline at a slower rate than expected and continue into 2008.

    Still, the new low-end tape automation product code named Dreadnaught that landed Overland another OEM deal -- believed to be with Dell -- has been pushed back by three months. (See Overland Preps More Low-End Tape and Overland Grabs New Partner.) It is expected to launch in the channel in June, with no target date given for OEM sales. When he announced the product last November, Calisi said he expected the product to launch in the first quarter of this year.

  • FalconStor lost $3.6 million or $0.08 per share and its revenue of $9.2 million fell 29.3 percent sequentially while increasing 9.74 percent year over year.