Storage firms revise Q2 forecasts

Bell Microproducts and EMC report struggling sales

The storage sector is the latest victim of the faltering IT industry as distributor Bell Microproducts, owner of Ideal Hardware, announced that it would make a loss from its second quarter, while storage vendor EMC lowered forecasts for the same period.

Bell said that preliminary sales for the quarter ended 30 June are expected to be about $450m, with a net loss from operations of $1.8m. However, sales for the quarter were up 18 per cent on the same period last year but significantly down against first-quarter sales of $534m.

To boost profitability, Bell will cut US staff and discontinue 25 manufacturers from its portfolio of 150 suppliers. The company's Minnesota warehouse and value-added centre will also be closed.

President Don Bell said he was pleased with the quarter given current market conditions, but added: "Demand for commodity semiconductors, disk drives and peripherals was disappointing. Moreover, the strength expected in the latter part of the quarter did not materialise, with lower than planned sales in all geographies."

Storage giant EMC has issued a warning that its second-quarter profit will be considerably lower than expected. The vendor now predicts turnover to be about $2bn, compared with original expectations of $2.43bn.

"EMC's business is being impacted with each unanticipated downward step in the global economy," said chief executive Joe Tucci in a statement.