Datalink downwardly revises Q2 guidance
Shares of Datalink Corp. (Nasdaq: DTLK) spiraled down 8.27%, or $0.52 to $5.77 in after-hours trading Monday after the information storage architect company announced it is downwardly revising guidance for the second quarter.
For the three months ended June 30, 2007, Datalink now expects to book revenues in the range of $40 million to $41 million, compared with previous guidance of between $49 million and $54 million given in April. The company had revenues of $39.8 million in the same period last year, and $40.9 million for the 2007 first quarter.
“We have seen a slowdown in IT and storage spending with some of our larger customers, as they have become more cautious about the economy and their individual growth prospects,” said Datalink's CEO Charlie Westling. “This cautiousness has created longer sales cycles, with a number of large projects delayed from the second quarter. As a result, we expect Datalink's revenue and earnings for the second quarter to be below our original guidance.”
Datalink said that revenue for the same period last year did not include the acquisition of Midrange Computer Solutions, which closed in February 2007. The company said that the first-quarter of 2007 included two months of Midrange Computer Solutions revenue.
“Our second-quarter results are not due to issues related specifically to the MCSI acquisition,” Westling said. “We are moving forward with training the MCSI team so they are able to sell and deliver the full spectrum of higher value-added solutions.”
For the second quarter, Datalink anticipates a non-GAAP loss in the range of $0.01 to $0.03 per diluted share, compared with non-GAAP net income of $0.11 per diluted share a year-earlier and a non-GAAP loss of $0.01 per diluted share in the first quarter of 2007.
“While this quarter's shortfall was disappointing to us, we still believe that the long-term trends for storage growth remain compelling, as corporations generate more data in multiple formats, requiring updated storage products and services,” Westling said.
