Storage Technology Corp. (StorageTek) (NYSE: STK) saw its stock price surge in morning trading today following the companys announcement yesterday that it had more than doubled its first-quarter earnings compared with the same quarter last year (see StorageTek Posts Q1 Sales Growth).
The companys stock climbed more than 9 percent, to $24.97 per share, in the morning session. It was up 5 percent, at $24.03, in midafternoon trading amid a mixed broader market for technology issues.
After the bell yesterday, StorageTek posted earnings for its first quarter of $16.5 million, or 15 cents per share, up from $6 million, or 6 cents a share, in the year-ago quarter. The companys revenue for the quarter also rose to $480 million from $455.9 million last year. Earnings exceeded the 13-cent-per-share consensus forecast of analysts polled by Thomson First Call.
"Even with weak economies and geopolitical unrest, we delivered a strong quarter," said Pat Martin, StorageTek's president and CEO, on a conference call yesterday. "Like many in our industry, we continue to see customer deferrals and elongated sales processes. However, we know that... we had the right offerings at the right time."
Martin said that several factors had helped StorageTek weather the ongoing storm in the storage market, including a 14 percent increase in the companys service revenues and a whopping 86 percent growth in disk product sales compared with the first quarter of 2002. The launch of new products, expansion of the companys distribution capacity, and increased investment in telemarketing also helped boost results.