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Quantum lost $19.5 million on its hard disk drive operations in its second fiscal quarter, despite a seven per cent rise in revenues to $824 million. The company described the loss as "disappointing" but claimed that things would be better next quarter, moving towards a break-even point.

Quantum shipped nine million drives during the quarter of which 8.4 million were destined for desktops - a million more than in the last quarter.

A highlight in its performance was the high-end market where gross margins stood at 28 per cent, and income doubled from previous figures. The company said that this was due to an improved pricing environment as well as a shift in buying patterns towards higher capacity drives.

A spokesman said that he expected the traditional surge in sales as we move into the festive season to be helpful to Quantum, but warned that the company could have trouble meeting demand.

He said component shortages and the ramp up of the company's new Fireball L20 drive were the constraining factors, but that revenue and unit shipments would still increase "slightly" in the quarter.

The company's HDD operations is to be folded into Maxtor. ®

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