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Emulex Says Expectations Could Still Be Met

Technology: Costa Mesa firm's executives offer an explanation after stock drops nearly 50% Monday.

February 14, 2001|From Dow Jones Newswires

Emulex Corp.'s senior executives Tuesday tried to put a better face on the company's forecast for the third quarter after its stock tumbled nearly 50% Monday.

The drop followed what many thought was an earnings warning issued Friday.

Executives of the Costa Mesa maker of computer storage networking products said they still could meet analysts' expectations of 23 cents per share for the third quarter, but also could miss the mark by 3 to 5 cents if revenue remains flat and customers continue to defer purchases. Their comments came during a Goldman Sachs technology conference.

Emulex shares closed Tuesday at $42.27, up $1.89 cents, or 4.7%, in Nasdaq trading.

On Friday, Emulex officials said more customers than expected had deferred orders for a new storage product. Under new Securities and Exchange Commission disclosure rules, the company conducted a Web cast Friday night to explain the order deferrals and to point out that earnings could miss estimates by 3 to 5 cents a share.

Analysts had expected the company to earn 23 cents per share for the third quarter ending April 1., according to a survey by First Call/Thomson Financial. The company anticipates about $69 million in revenue for the third quarter.

The company's earnings for the fiscal year are a tossup as well, said Mike Rockenbach, chief financial officer. "We can do 85 cents per share for the year, or 75 cents if [revenue is] flat," he said.

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