Shares of Santa Ana-based STEC Inc., a maker of memory products for industrial uses, plunged 25% Tuesday after the company warned a day earlier that profits would be lower than Wall Street’s expectations for the current quarter.
STEC, formerly SimpleTech Inc., expects profits of $491,300 to $1.5 million on sales of $41 million to $43 million for the June quarter.
Analysts were looking for about $5 million in profits on sales of $49 million.
The company said it was squeezed by the more than 50% drop in prices of memory chips this year and weak demand at its largest customer. It didn’t name the customer.
STEC reported earnings,which beat analysts’ expectations,for the three months ended March 31 after the market close on Monday.
Sales were about $47 million, up nearly 17% from a year ago. Analysts expected $45 million.
STEC saw profits of nearly $7 million, up from about $1 million in the year-ago quarter.
The company said results included a gain of about $4 million from the February sale of its consumer memory division to San Jose’s Fabrik Inc.
STEC said it also took a post-tax charge of $489,000 related to startup costs for its Malaysian plant and expenses related to Sarbanes-Oxley compliance, among other items.
