If you have been trading stocks for more than 10-years, you will remember that Iomega (NYSE: IOM) used to be a monster stock for a brief period of time. That time came and went and it’s been a long quiet road since. The company makes small portable storage drives that are generally larger than those key-sized flash drives that everyone has.
Interestingly enough, the company actually raised its guidance this morning, and this was from guidance that was just issued back on December 12, 2007. The company put its Q4 net revenue in a $117 to $121 million range. It also put net income at $0.09 to $0.11 on a fully diluted basis and non-GAAP earnings at $0.06 to $0.08 EPS. Previous guidance was $92 million in revenue on non-GAAP EPS on $0.04.
The non-GAAP estimates include a $3.5 million one-time pre-tax benefit related to a prior license of intellectual property and pre-tax expenses of $1.2 million for external professional fees related to the acquisition of ExcelStor Group.
It is hard to imagine that this will be taken as bad news, but this sector is still one that many feel has passed Iomega by and left it in the rear view mirror. It has made much effort to get into portable media storage and offers large portable drives of 500 GB now for only about $220.00, so it is far removed from being that little Zip Drive company we once knew. Its balance sheet is also in good shape for a small cap stock.
Iomega share closed at $2.35 Friday, and the 52-week trading range is $2.26 to $5.75. Its market cap is now only $128.7 million. We can’t call this one a comeback yet, but you might have some of the old long-term believers at least a little happier today.
Jon C. Ogg
January 22, 2008
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