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Veritas Takes a Dive

More evidence that this might be a rocky quarter for storage companies surfaced today when Veritas Software Corp. (Nasdaq: VRTS) preannounced quarterly earnings below its previous guidance (see Veritas Announces 2Q Results).

Veritas CEO Gary Bloom said the company expects revenues between $475 million and $485 million for the quarter that ended in June, compared to its previous forecast of $490 million to $505 million. Bloom said he expects earnings per share from $0.18 to $0.20, down from previous guidance of $0.22 to $0.26. Veritas will report its quarterly earnings on July 27.

Veritas is the third storage networking company to downgrade its earnings forecast since the end of June. Last week, HBA vendor Emulex Corp. (NYSE: ELX)
and tape library company Overland Storage Inc. (Nasdaq: OVRL) said they would report earnings and revenues below previous estimates (see Emulex Hits the Deck and Overland Guides Under). Those companies blamed soft OEM sales, and analysts say a poor quarter by Hewlett-Packard Co. (NYSE: HPQ)
hurt both.

Bloom blamed seasonally weak U.S. sales in late June for Veritass woes. "As we have indicated previously, software license orders are generally concentrated in the later part of the third month of the quarter,” he said in a statement. “At the end of the June quarter, our anticipated order flow weakened, contributing to lower-than-expected license revenues."

Bloom said the company’s services business was strong, and revenue in Europe and Asia/Pacific met expectations. He said license revenue will likely fall between $263 million and $273 million, with services revenue, coming from consulting and help with product installation and maintenance, of approximately $212 million.

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