Xyratex (XRTX) Lowers Guidance
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Xyratex Ltd (Nasdaq: XRTX) now anticipates revenue for the 2008 fourth quarter to be in the range of $280 to $285 million. This compares to the company's previously announced targets of $287 to $307 million. The Wall Street consensus is $296.5 million.
The company also anticipates that its GAAP and non-GAAP earnings per share will be significantly below the previously announced target as a result of the lower revenue and a reduction in gross margin for the Networked Storage Solutions business to a range of between 8 and 10%.
CEO Steve Barber said, "Our revised guidance for the fourth quarter reflect the challenging macroeconomic environment as well as a number of gross margin impacts, some of which we anticipate will be non-recurring. Given the current environment, we are planning to reduce costs to better align our expenditures with demand, whilst maintaining our investment in core technologies. This will include a reduction in regular headcount in the first quarter of 2009. Our cash position of approximately $26 million and no debt at year end is in line with our expectations, and coupled with our recently renewed and undrawn bank facilities of up to $55 million provides a strong liquidity position. That said, we will continue to provide increased focus on working capital management."
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