Mylex Corp, the Fremont, California-based provider of storage hardware and software, says that results for its first quarter, ending March 31, will fall below Wall Street expectations. The company is complaining of weaker-than-anticipated sales demand from its higher-margin distribution channels worldwide and an unfavorable product mix for quarterly sales already booked. Back in January, Mylex had said it expected revenue in the first quarter that would be roughly flat with the fourth quarter’s $39m and projected a slight profit. Analysts surveyed by First Call had been looking for earnings of $0.05 per share.
The company now says that it is close to its revenue target, but the mix of business currently booked will adversely impact gross margins. Specifically, the problem stems from stronger-than- expected sales of the company’s newly-released low cost RAID systems, which carry a far lower gross margin than other products. Thus the bottom line is now projected as break-even or a slight loss. Mylex will release final results for the quarter on April 22.
