Shares of Xyratex Ltd. surged Monday after the British data storage company sharply raised its first-quarter profit and sales guidance on improving demand.
"We have continued to see an improvement in demand in both our businesses and across all of our major customers," said CEO Steve Barber in a statement. "We are confident that the fundamentals within the markets we serve will continue to improve into our second quarter."
The company now expects a profit of 77 cents to 87 cents per share on revenue of $313 million to $318 million for the quarter ended Feb. 28. That's well above its prior outlook for earnings between 24 cents and 52 cents per share on sales of $245 million to $285 million.
The company said the upside in revenue this quarter is mainly due to its networked storage solutions business and reflects the shipment of fourth-quarter backlog as well as rising demand in the current period.
Analysts, on average, are expecting a profit of 46 cents per share and revenue of $270.6 million, according to a poll by Thomson Reuters.
Shares rose $2.47, or 16 percent, to $17.80 in late morning trading. Earlier, the stock hit a 52-week high of $18.47.
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