But some industry analysts remained cautious on StorageTek's outlook. A.G. Edwards analyst Shebly Seyrafi points out that without favorable currency exchange rates, the quarterly revenues would actually have decreased 1.2 percent year over year, instead of showing an increase of 5.3 percent. About $30 million of StorageTek's revenues in the quarter were attributable to favorable currency exchange rates. "Without the currency, this company would not have grown," he says.
As for the StorageTeks stock swell, Seyrafi says investors had probably expected the company to do worse, since the first quarter is traditionally its worst. "The stock appears to be fully priced," he says. "I would not be recommending purchases at these levels."
Other analysts are more optimistic. "We believe that STKs fundamentals have shown gradual yet steady improvement since the appointment of a new CEO in the fall of 2000," Needham & Co.
analyst Glen Hanus wrote in a research note today. "We believe that the odds favor slow continuing improvement of STKs fundamentals over the next year."
The company reiterated its guidance for 2003, saying it expects revenue growth in the low to mid-single digits. The company expects net income for the year to be $125 million to $135 million. Analysts surveyed by First Call expect StorageTek to earn $1.18 a share in 2003.
The company also reiterated its capital spending estimate of $60 million to $80 million, but StorageTek CFO Robert Kocol said on yesterdays call that its likely to be closer to the lower end of the range.
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