Despite numerous cries about the softening of the PC market,
Maxtor Corp. announced a net income of US$5 million dollars for the final quarter of 2000, up one million from the fourth quarter of 1999. Revenues for the hard drive manufacturer also rose 5 percent in the quarter to $727.2 million, and diluted earnings per share rose one cent to four cents per share in the fourth quarter 2000 over 1999.
Maxtor also reported that its net income would have been substantially higher if not for a $7.7 million dollar settlement this quarter from a pending suit in February. If adjusted for this payment, Maxtor’s net income would have been $12.1 million, and diluted earnings per share would have been ten cents per share.
Maxtor also closed 2000 with a sound profit. Revenue for 2000 was up $200 million over 1999 to $2.7 billion. Net income for 2000 was $31.8 million, or 27 cents per share. This put Maxtor’s 1999 loss of $50.1 million well behind them.
During the fourth quarter, Maxtor shipped 7.4 million drives and had a gross profit margin of 14.5 percent. Maxtor also increased cash and marketable securities by $25 million over the year, reaching $376 million at year’s end.
Mike Cannon, Maxtor’s President and CEO, attributes Maxtor’s performance to strong, consistent execution. He says that Maxtor was able to adapt to changing market conditions and manage its supply chain effectively. Also, Maxtor was able to efficiently retool for new products, especially for 20GB per disk mechanisms.
Maxtor also reported that its line of IEEE 1394, know to the Mac market as FireWire, drives and its network attached storage products saw good market acceptance.
Finally, Maxtor announced that its proposed merger with Quantum’s Hard Disk Drive Group is proceeding. The merger cleared the Hart-Scott-Rodino regulatory requirement and received European Union approval for the merger to proceed in December. The merger still awaits SEC approval and joint shareholder approval. Maxtor expects the merger to conclude in March or April of 2001, pending shareholder approval.