Overall, ADIC's branded sales accounted for 51 percent of total sales during the quarter. In the third quarter of 2002, its split was 61 percent branded and 39 percent OEM.
On the strength of ADIC's results, Bear Stearns & Co. Inc. upgraded the stock from Peer Perform to Outperform. "ADIC has delivered upsides for three quarters in a row," wrote Bear Stearns analyst Andy Neff in a note today. "Its outlook for 4Q03 and FY04 was better than our estimates, and ADIC's growth outlook is improving owing to new products as well as expanding OEM customer engagements."
ADIC said it expects branded sales -- particularly for its recently introduced Scalar i2000 tape library and its forthcoming disk-plus-tape option -- to increase in the fourth quarter (see ADIC Sticks In Some Disk and ADIC Launches i2000 Library). But the company also cautioned that continued strength in OEM sales could keep average gross margins from matching those it experienced in the second quarter of 2003.
Meanwhile, the company's total cash, cash equivalents, and marketable securities increased by about $17 million during the quarter, to $204.6 million.
One of ADIC's competitors, Overland Storage Inc. (Nasdaq: OVRL), also reported upbeat earnings this week, with revenues growing to $56.5 million, up 62 percent over the same quarter last year. However, Overland's stock price was hurt because of investor concern that its OEM sales had remained flat (see Overland Loses on Profits).
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