Dot Hill Systems lowers revenue guidance, narrows net loss expectations
Dot Hill Systems Corp. (Nasdaq: HILL) warned this morning that it now expects lower revenues for the third quarter than it previously guided for, but also said it expects a narrower net loss than previously anticipated.
For the three months ended Sept. 30, the storage systems provider said it now anticipates revenues to be in the range of $43 to $46 million based on preliminary results. This compares with previously issued revenue guidance of $50 million to $54 million and revenues of $54.8 million in the third quarter of 2006. Three analysts polled by Thomson Financial are on average anticipating revenues of $53.24 million.
The Carlsbad, Calif.-based company attributed the revenue deflation primarily to slower than projected product ramp of one of its large original equipment manufacturers.
The company also narrowed its expectations for a net loss. It expects to report a net loss in the range of $0.06 to $0.11 per share, an improvement over original guidance of a net loss of $0.09 to $0.14 per share.
This compares to a net loss of $1.34 per share in the third quarter of 2006, inclusive of a tax charge of $1.17 per fully diluted share. Excluding this tax charge, the net loss for the third quarter of 2006 would have been $0.17 per share.
The consensus of three analysts polled by Thomson Financial is for a net loss of $0.11 per share, toward the upper range of the company’s new bottom line guidance.
The company also said it expects its cash position to shrink to $90 million from $108.5 million in the third quarter last year.
Dot Hill said it anticipates gross margins for the third quarter in the range of 13% to 17%, compared with 12.8% for the third quarter of 2006.
The small cap is still completing its review of its third quarter 2007 financial results which includes an analysis of the impairment of goodwill. The company plans to release final results on its regularly scheduled conference call which will take place on Nov. 8, 2007
Shares of Dot Hill (HILL) slid $0.20, or $6.08, to $3.09 at 10:32 a.m. ET. Shares of Dot Hill have been trading in the range of $2.88 to $4.44 for the past 52 weeks.
