Shares of Santa Ana’s STEC Inc., a maker of flash memory drives for corporate data centers, on jumped on Tuesday after the company gave a profit outlook for the current quarter that trounced what Wall Street analysts had been expecting.
Investors sent the stock up more than 5% in afterhours trading on a recent market value of $778 million.
STEC said it’s looking for adjusted fourth-quarter profits of $16 million to $17 million, down roughly 35% from a year earlier and topping the $13 million in profits analysts had been forecasting.
The company said it’s expecting sales of $88 million to $90 million, down 16% and in line with analysts’ expectations of $88.5 million in revenue.
The rosier outlook comes on the heels of STEC’s results for the third quarter, which also surpassed expectations.
STEC tallied $86 million in revenue, down 12% from a year earlier but beating analysts’ expectation of $79 million in sales.
Excluding charges for stock compensation, income tax, write-downs on assets and other one-time costs, STEC posted $16 million in profits, down 38% and surpassing analysts’ expectation of $10 million in profits.
STEC makes what’s called solid state drives.
They have no moving parts, are more durable and are faster at some tasks than traditional spinning disk drives. They’re also pricier than the old disk standbys, but are seen as taking off for corporate storage.
STEC’s been challenged to diversify its customer base from its top customer, Hopkinton, Mass.-based EMC Corp.
EMC accounts for more than 60% of STEC’s yearly sales.
The company has seen some success diversifying, according to Chief Executive Manouch Moshayedi.
“We delivered a solid quarter shipping solid state drives to multiple enterprise storage customers which helped drive top-line revenue growth,” he said. “A key factor contributing to our positive third quarter 2010 results has been the increasing number of our customers.”
