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Adaptec warns on 4Q
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March 23, 2001: 10:34 a.m. ET
Data storage firm says distributors' inventory pressures hurting sales, profits
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NEW YORK (CNNfn) - Adaptec Inc., which makes hardware and software for data storage, issued its second warning this month on fiscal fourth-quarter earnings and sales, saying Friday that results will be worse than even the previous warning projected.
The company said it now expects earnings per share of 2 to 4 cents in the quarter ending this month. On March 2, the company lowered earnings per share guidance for the quarter to 10 to 15 cents. Before that warning, analysts surveyed by earnings tracker First Call had expected EPS of 23 cents, then lowered their forecasts to 12 cents before the latest warning.
 The company earned 49 cents a share in the year-ago quarter and 26 cents in the third quarter.
Adaptec also said sales will fall an additional 10 to 12 percent from earlier guidance. Analysts had used that guidance to lower revenue estimates for the period to $180 million, just below the third quarter's revenue of $186.3 million.
The Milpitas, Calif.-based company blamed inventory pressures from its worldwide distributors for missing projections.
"We are working with our distribution partners to help them reduce inventories and conserve cash as they grow increasingly concerned about the economic slowdown," chief financial officer David A. Young said. "As the economy recovers, we will be very well positioned to return to traditional inventory levels in the channel."
The company announced plans Tuesday to cut 450 jobs, or approximately 20 percent of the workforce worldwide, as well as cutting discretionary spending, such as marketing expenses, travel and contract services. It said the move was part of a restructuring plan driven by the economic slowdown to cut costs $44 million a year.
Despite the latest warning, shares of Adaptec (ADPT: Research, Estimates) gained 13 cents to $9.75 in early trading Friday. 
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