Quantum Falls 9% as Q1 Sales Drop 28%, Miss Estimates

In contrast to disk drive maker Western Digital (WDC), whose shares are rising this evening on a strong Q4, storage equipment maker Quantum (QTM) is down 9 cents, or 9%, at 92 cents this evening after the company missed analysts’ sales estimates for its fiscal Q1.

Sales fell 28%, year over year, to $160 million, “primarily reflecting the significantly weaker economy,” the company reported. That compares to an estimate of $170.6 million, although Profit per share came in at 2 cents per share, or a net loss of 3 cents if one includes stock options, restructuring, amortization, and other charges. Two analysts, Brian Freed with Morgan Keegan, and Glenn Hanus with Needham & Co., have been modeling 3 cents and 2 cents, respectively, suggesting the company either met or fell a penny short of those estimates.

Quantum CEO Rick Belluzo remarked that despite a “challenging economic environment,” the company was able to improve its gross profit from 33.7% in the first quarter to 38.4% this quarter, and was able to boost generate $33 million in cash from operations and pay off $41 million of its senior debt. The company ended the quarter with $78 million in cash and equivalents, down from $87 million a year earlier, and long-term debt of $280.8 million, up from $244 million a year earlier.