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Maxtor loss balloons on job cuts, falling ASPs

Tough Q3 for HDD maker

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Maxtor, like Seagate, saw revenue rise above its expectations during its most recently completed fiscal quarter, its third, but unlike its rival better-than-anticipated sales proved insufficient to lift it out of the red.

For the three months to 25 September 2004, Maxtor achieved sales of $927.2m, down 13 per cent on the same period last year but up 14 per cent on Q2's $813.3m total.

Despite that gain, the company's net loss widened from Q2's 26.1m (11 cents a share) to $90.6m (36 cents a share). For Q3 2003, the company recorded a net income of $29.9m (12 cents a share). Contributing to Q3 2004's loss was $27.2m relating to the loss of 400 staff, plus a further amortisation of intangible assets of $5.1m, but that still leaves the company's loss far larger this quarter than Q2's

On a non-GAAP basis, excluding these charges, Maxtor reported a net loss of $58.3m (23 cents a share), compared to $45.8m (19 cents a share) in Q2.

Maxtor shipped 13.8m drives during the quarter, whose average selling price fell from $71 in Q2 to $67. Gross margins fell from nine per cent in Q2 to 6.4 per cent, largely thanks to the price dip. ®

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