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By | Chris Mellor 1st May 2014 11:19

WAN-furtling pays off for app-happy Riverbed

But Imation results looking worse for wear

There were contrasting results yesterday from Riverbed, which has a spring in its step, and Imation, which does not, but hopes to have, eventually.

Riverbed's first 2014 quarter showed revenues of $265m, 8 per cent higher than a year ago. Profits of $3.3m were low, just 1.2 per cent of the revenues, but they were a welcome about-turn from the $8.1m loss of a year ago.

Jerry Kennelly, the chairman and CEO, concentrated on the annual compares in his scripted quote: "Year-over-year revenue growth was led by WAN optimisation and strength in enterprise and international sales. We are also very encouraged by our performance management business with increasing revenue from channel partners and significant growth in Europe."

He was positive about the future – although what CEO wouldn't be? "As customers increasingly adopt the full breadth of our Application Performance Platform, we expect to achieve higher than industry growth across all of our product lines. ... Riverbed improves business performance by improving application performance. We see tremendous opportunity ahead of us."

That can't yet be true of Imation, which reported first quarter revenues of $178.9m, a good 20 per cent down on a year ago and 23 per cent down on the previous quarter.

Imation's revenue shrink continues, with CEO Mark Lucas noting: "approximately 65 per cent of our volume is in declining businesses," and describing a "sluggish IT environment." The growth businesses aren't growing anywhere near fast enough to offset the constant declines from products which are on the way down.

Imation made a loss of $17.5m in the quarter, which compares badly to a $16.7m profit in the previous quarter and better to the $21.2m loss recorded a year ago. He did not say revenues from the acquired Nexsan storage business were stellar, instead commenting "Nexsan participates in a very attractive market; hybrid storage has a 21 per cent growth rate and is on a trajectory to become 45 per cent of the external storage market by 2017. We are confident we are on the right course for long-term growth.”

Revenues from the Tiered Storage and Security Solutions (TSS) business, which includes Nexsan, decreased 23.1 per cent in the quarter compared to a year ago. Nexsan's NST hybrid array line had better produce the revenue goods.

Consumer Storage and Accessories (CSA) revenue decreased 17.9 per cent in the quarter on an annual basis, "due primarily to the ongoing secular declines in optical media products."

Positive notes were:

  • The sake of its loss-making consumer electronics XtremeMac business
  • Solid growth in the TDK Life on Record audio and accessories portfolio

Lucas did not say how many quarters, or years for that matter, would be needed before he could see regular profits coming in. Possibly profitability might be regained by the end of this year, at which point Lucas and his team will heave a huge sigh of relief. Come on Nexsan reps: sell the hell out of the NST arrays. Imation is depending on you. ®

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