Imation Corp, the Oakdale, Minnesota-based maker of imaging and data storage products, has reported second-quarter net income up 9.1% at $4.8m on revenue down 6.8% at $517.1m. Earnings per share for the quarter were $0.12, also a 9.1% increase year-over-year. Results for the quarter were boosted by a one-time gain of $3.6m from the final adjustment of restructuring reserves recorded by 3M Company, prior to the former parent’s spin-off of Imation. Without the gain, earnings per share for the quarter were just $0.03, well short of the First Call consensus of $0.08. Imation said that operating results in the US benefited from recent cost- cutting moves, although business in Europe continued to be weak – a refrain once quite common following bad numbers which has abated in recent months. Sales for the quarter were also affected by the tailing off of older-generation products. The ongoing restructuring activity, originally announced last November (CI No 3,281), has seen the company’s total headcount decline by 500 from the previous quarter and the rolls now stand at 9,000. Imation had previously said it would be eliminating 1,700 staff by the end of the calendar year. Gross margins for the quarter improved from 34.8% to 35.6%, also a benefit of cost reduction efforts and the shift toward some newer, higher-margin products, such as the backward-compatible 3.5 120Mb SuperDisk format, which saw sales triple year-over-year. Imation said that one year ago SuperDisk had one hardware OEM, where as today it has about 50, with 2 million drives on the market. The company also said its sales focus in storage will be the high-end corporate market as opposed to retail. Six-month net income fell 58.5% to $6.8m on revenue down 6.0% at $1.04bn. Earnings per share rose 9.1% to $0.12 for the quarter while they fell 57.5% to $0.17 for the six months.
