Shares of Santa Ana’s STEC Inc., which makes flash memory drives for corporate and industrial uses, jumped Monday after the company announced a $28 million government contract.
Investors sent shares up almost 14% at the close of New York trading on a recent market value of about $1.3 billion.
STEC said it teamed up with a top defense contractor to supply its industrial-grade solid state drives to the military. It didn’t name the contractor.
Solid state drives, made of flash memory chips with no moving parts, are more durable and use less power than traditional disk drives. Solid state drives can also work in extreme temperatures.
They often are used in devices where failure can be costly.
“We are proud to have been selected to provide our solid state drives for use in this military initiative,” Chief Executive Manouch Moshayedi said. “This contract win demonstrates that our solid state drive technologies are adaptable and appropriate for a broad range of industries.”
STEC said the year-long contract is set to begin during the third quarter.
The company has been on a roll lately as its announced a series of design wins for its solid state drives, which also are used by banks, insurance companies and others that have to keep track of a lot of data.
STEC enjoys a rare position for a technology company these days: a near monopoly.
The company’s shares have quadrupled since the start of the year.
Last year, it rolled out a line of solid state drives that are set to be built into servers made by EMC Corp., Hitachi Data Systems Corp., Sun Microsystems Inc. and others. It also recently announced design wins with IBM Corp. and a unit of Fujitsu America Inc.
For the three months through June, STEC expects to report profits of $14 million to $16 million on sales of $82 million to $84 million.
Wall Street analysts, on average, are looking for profits of $16 million on sales of $83 million.
