Shares in Quantum Corp fell as much as 13% Friday after the hard disk and tape drive maker warned that its first-quarter earnings would be well below expectations. The shares fell as low as $17, before recovering in afternoon trading to close down $0.5625 at $19. More than 13.9 million shares changed hands – roughly 5.5 times the stock’s average daily volume.
The Milpitas, California-based company said it expects earnings to be in the range of $0.05 to $0.15 for the June quarter on revenue that will come in below the $1.31bn booked in the fourth quarter. Analysts surveyed by First Call were expecting earnings of $0.31 for the quarter. In the year-ago quarter, Quantum reported net income of $3.0m, or $0.02 per share, on revenue of $1.1bn
Quantum is blaming the shortfall on overall pricing pressure in the desktop hard disk drive market. The company says price erosion is far worse than it had expected going into the quarter, with the sequential rate of price decline roughly double that of the prior two quarters. Although it insists demand for both PC hard drives and high-end tape drive remains strong, the boom in low-cost machines and aggressive price cuts by rival Seagate Technology Inc have hit Quantum hard. á
