Tag - Dtlk

The amount of data that corporations must store, back up and protect from prying eyes these days is growing like federal deficits in the midst of a recession. Data storage needs are currently expanding by some 60% annually (although decreasing prices and increasing efficiencies mean costs rise at a fraction of that rate). That provides significant opportunity for companies such as Datalink Corp. (Nasdaq:DTLK), a tightly-run small cap that designs, installs and services customized storage systems that keep corporations running.

Datalink, based in Chanhassen, Minn., is one of the few IT companies enjoying a strong run in a weak market. It beat Wall Street estimates in the last two quarters, and guidance for the coming quarter is strong. In the first quarter this year, reported on April 16, revenue was up 17% to $47.7 million, a record increase for a first quarter, which tends to be a weak one. Net income was $769,000, compared with a $153,000 loss a year ago, and at $0.06 per share beat Street estimates by a penny. Its gross margin of 26.5% was the highest since the fourth quarter of 2004, its backlog of $30 million was only slightly off the previous quarter's record $31 million, and the company's second-quarter guidance is for EPS between $0.07 and $0.11 on revenue of $48 million to $52 million — and this is a company that tends to hit the high end of its guidance. Datalink's current growth rate is about twice that of the overall industry rate of about 6%.

But Datalink doesn't seem to be getting much love from investors. At Tuesday’s closing, the stock was at $4.85, well below its 52-week high of $7.17, reached last June as it was suffering through its second consecutive quarter of losses. The stock has barely rebounded from its 52-week low of $3.54 just before earnings were announced. Its market cap is $61 million.

In his April 17 report, analyst Clinton Morrison with Feltl & Co. wrote: "We have a hard time understanding why DTLK should be trading close to the bottom of a two-year range." Morrison rates DTLK a "strong buy" with a target price of $7, based on . . .

Datalink Corp. (Nasdaq: DTLK) slashed its second-quarter earnings outlook to a loss of between $0.03 and $0.05 per share. Previously, the computer storage company had expected earnings-per-share of between $0.02 and $0.07. Wall Street analysts are expecting earnings-per-share of $0.06.

Electronics and microwave components company Anaren, Inc. (Nasdaq: ANEN) announced that accounting mishaps at its Chinese subsidiary may cause the company to restate its second and third quarter results.

These are the biggest percentage losers in Tuesday's trading among companies with market capitalizations under $500 million:

Shares of Datalink Corp. (Nasdaq: DTLK) spiraled down 8.27%, or $0.52 to $5.77 in after-hours trading Monday after the information storage architect company announced it is downwardly revising guidance for the second quarter.

For the three months ended June 30, 2007, Datalink now expects to book revenues in the range of $40 million to $41 million, compared with previous guidance of between $49 million and $54 million given in April. The company had revenues of $39.8 million in the same period last year, and $40.9 million for the 2007 first quarter.

“We have seen a slowdown in IT and storage spending with some of our larger customers, as they have become more cautious about the economy and their individual growth prospects,” said Datalink's CEO Charlie Westling. “This cautiousness has created longer sales cycles, with a number of large projects delayed from the second quarter. As a result, we expect Datalink's revenue and earnings for the second quarter to be below our original guidance.”

Datalink said that revenue for the same period last year did not include the acquisition of Midrange Computer Solutions, which closed in February 2007. The company said that the first-quarter of 2007 included two months of Midrange Computer Solutions revenue.

“Our second-quarter results are not due to issues related specifically to the MCSI acquisition,” Westling said. “We are moving forward with training the MCSI team so they are able to sell and deliver the full spectrum of higher value-added solutions.” 

Atlantic City, N.J.-based Trump Entertainment Resorts, Inc. (Nasdaq: TRMP) said negotiations with potential buyers have terminated with no acquirer in sight.

Marketing software maker Unica Corp. (Nasdaq: UNCA) dismissed its auditor Ernst and Young LLP and was subsequently downgraded to “sell” from “neutral” by Ferris Baker Watts. The Waltham, Mass.-based company provided no reason for dismissing its auditor.

These are the biggest percentage losers in Monday's trading among companies with market capitalizations under $500 million:

Momenta Pharmaceuticals, Inc. (Nasdaq: MNTA) reported the FDA’s review of its blood clotting drug M-Enoxaparin is probably going to be lengthier than previously projected.

These are the biggest percentage losers in Thursday's trading among companies with market capitalizations under $500 million: