Quantum's Losses Roll On

Quantums losses continued with its Q4 results tonight, as the vendor continues to struggle with execution issues.

The vendor’s fourth quarter revenues were $229 million, down 17 percent on the same period last year, well below analyst estimates of $241.46 million and 5 percent below the low range of the vendor’s guidance. For the full year, Quantum’s revenues were $976 million, down 4 percent on fiscal 2007, and also below analyst estimates of $986.08.

On a GAAP basis, Quantum’s Q4 losses narrowed to 8 cents per share on a net loss of $15 million, compared to losses of 10 cents and $20 million in the year-ago quarter.

“Our challenges this year were largely based on execution,” admitted Jon Gacek, Quantum’s CFO, during a conference call earlier today. “We experienced weakness in our North America and Asia branded business.”

This is not the first time that Quantum has wrestled with execution issues, with its North American branded business also a problem area during the third quarter.Quantum’s fourth quarter revenues took a hit from the first generation of its DXi enterprise backup systems, which did not generate revenue as quickly as expected. The vendor also struggled to implement a new sales model, according to Rick Belluzzo, the Quantum CEO.

In an attempt to solve these issues, the vendor has restructured its North American sales organization, and has also set up a sales team specifically to sell the DXi hardware.

“We’re [also] partnering more closely with ISVs and server virtualization providers,” said Belluzzo, explaining that it could take “several quarters” before the vendor reaps the benefits of its sales re-organization.

Quantum’s de-dupe OEM deal with EMC cropped up repeatedly during tonight’s call, although execs would not reveal exactly what the storage giant will do with the technology.

“We will not be commenting on EMC’s product roadmap, but we believe that this is a significant achievement and important validation of our technology,” said Gacek. “We do expect to realize revenue related to this agreement in fiscal 09.”The Quantum finance chief was equally cagey on the subject of the vendor’s legal dispute with WAN optimization specialist Riverbed.

“The case is pending in California,” he said. “The case is scheduled to go to trial in February of 09, and we continue to feel good about our position.”

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