Higher marketing costs crimp Fusion-io profit, shares fall
(Reuters) - Storage drive maker Fusion-io Inc (FIO.N) reported a bigger quarterly loss as it spent more on marketing and incurred costs related to absorption of employees from a company it acquired in April.
Fusion-io shares fell 20 percent in extended trading after closing at $14.90 on the New York Stock Exchange on Wednesday.
The company said it absorbed about 60 employees of Colorado-based NexGen Storage during the quarter.
Fusion-io employs about 940 people now, up by about 270 from a year earlier.
The company's marketing costs rose by 51 percent, resulting in a negative operating margin of 22.4 percent for the fourth-quarter.
The company, which counts Facebook Inc (FB.O) and Apple Inc (AAPL.O) among its key customers, reported its first quarterly numbers after founders David Flynn, the chief executive, and Rick White, chief marketing officer, resigned in May.
Fusion-io, which makes solid state memory drives using NAND flash technology, has been diversifying its revenue base as it faces intense competition from larger rivals such as EMC Corp (EMC.N), Micron Technology Inc (MU.O) and SanDisk Corp (SNDK.O).
The company expects revenue to grow 20 percent for the year ending June 2014, implying sales of about $519 million. It had previously forecast full-year sales of about $435 million.
Analysts were expecting revenue of $564 million, according to Thomson Reuters I/B/E/S.
"If you are looking at the guidance for the full-year and looking at what they have guided for the first-quarter, getting to the full-year number is also going to be a challenge," Craig Hallum analyst Rajesh Ghai told Reuters.
Fusion-io forecast first-quarter revenue of between $80 and $90 million. The company reported a marginal drop in revenue to $106.05 million in the fourth quarter.
This anticipated quarter-over-quarter decline is primarily driven by lower-than-expected revenue from Facebook, Chief Financial Officer Dennis Wolf said on a conference call with analysts.
Analysts were expecting first-quarter revenue of $123.8 million
Fourth-quarter loss widened to $23.8 million, or 24 cents per share, in the fourth quarter, from $2.4 million, or 3 cents per share, a year earlier.
Excluding items, company posted a loss of 3 cents per share.
Analysts had expected a loss of 3 cents per share on revenue of $110.2 million.
(Reporting by Sruthi Ramakrishnan and Lehar Maan in Bangalore; Editing by Akshay Lodaya and Maju Samuel)
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