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STEC Shares Rise on Rosier Q3 Outlook

Shares of Santa Ana’s STEC Inc., a maker of memory devices for industrial uses, rose in afterhours trading after the company reported a better-than-expected outlook for the current quarter.

STEC’s stock first slightly dropped about 1% at the close of trading before shooting up some 10% in afterhours.

The company’s outlook for the third quarter is riding on its recent release of a new flash memory product that’s expected to bring in an additional $5 million to $10 million in sales this year, according to Chief Executive Manouch Moshayedi.

STEC said it expects to post a profit of about $2 million to $3 million on sales of $43 million to $45 million. Analysts, on average, are looking for about $2 million in profits on sales of $44 million.

STEC currently is building a new plant in Malaysia, which is expected to add to its production when it opens later this year, the company said.

The rosier outlook came on the heels of STEC’s second-quarter results, which beat analysts’ expectations.

Sales totaled about $44 million, down about 8% from the year ago quarter, beating estimates of about $42 million.

Including costs from construction of the Malaysian plant and other charges related to taxes and compliance with government regulations, STEC posted a profit of about $1.4 million for the quarter, down from about $4.5 million a year ago.

Still, that beat analyst views of $1 million in profits.

Excluding the charges, STEC posted a profit of $2.4 million.

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