Xyratex (XRTX) Tanks After Company Blows Q3
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Shares of Xyratex, Ltd. (NASDAQ: XRTX) are trading sharply lower after-hours Tuesday in the wake of disappointing third quarter earnings and guidance. At $276 million, Xyratex reported third quarter revenue that was below estimates which called for revenue of $316 million. This was a decline of 24 percent compared to revenue in for the same period last year.
Earnings were also worse than expected, coming in at 37 cents vs. expectations of 44 cents on a Non-GAAP basis. Last year, Xyratex Non-GAAP EPS was 42 cents.
"Our third quarter proved to be a very challenging quarter due to a number of factors as we stated in our press release last month,” said Steve Barber, CEO of Xyratex. “Over the last few weeks, we have been able to resolve most of the technical and performance issues with our latest Capital Equipment and High Performance Computing products that prevented us from recognizing the associated product revenue prior to the end of the third quarter and we are working very closely with our customers to resolve the remaining issues.”
"With regard to the weaker than expected enterprise storage demand that impacted our quarterly results, I do believe that the industry dynamics are weaker than what was expected a few months ago and as a result we have taken a more cautious outlook going forward," said Barber.
Over the next 18 to 24 months Barber says he see opportunity in Big Data/High Performance Computing that will be positive for the company.
Xyratex guidance for the fourth quarter calls for a Non-GAAP loss of $0.15 to $0.43 versus the consensus of a $0.49 profit. Xyratex, Ltd. sees Q4 2012 revenue of $235-285 million, versus the consensus of $327.90 million.
Shares of Xyratex last traded at $7.58, down 12.9 percent.
Earnings were also worse than expected, coming in at 37 cents vs. expectations of 44 cents on a Non-GAAP basis. Last year, Xyratex Non-GAAP EPS was 42 cents.
"Our third quarter proved to be a very challenging quarter due to a number of factors as we stated in our press release last month,” said Steve Barber, CEO of Xyratex. “Over the last few weeks, we have been able to resolve most of the technical and performance issues with our latest Capital Equipment and High Performance Computing products that prevented us from recognizing the associated product revenue prior to the end of the third quarter and we are working very closely with our customers to resolve the remaining issues.”
"With regard to the weaker than expected enterprise storage demand that impacted our quarterly results, I do believe that the industry dynamics are weaker than what was expected a few months ago and as a result we have taken a more cautious outlook going forward," said Barber.
Over the next 18 to 24 months Barber says he see opportunity in Big Data/High Performance Computing that will be positive for the company.
Xyratex guidance for the fourth quarter calls for a Non-GAAP loss of $0.15 to $0.43 versus the consensus of a $0.49 profit. Xyratex, Ltd. sees Q4 2012 revenue of $235-285 million, versus the consensus of $327.90 million.
Shares of Xyratex last traded at $7.58, down 12.9 percent.
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