Bleak outlook for Xyratex

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XYRATEX’s third-quarter profit fell 20 per cent as the company reported that its enterprise storage sales dropped sharply.

The firm has its global headquarters at Langstone Technology Park, and said it was taking a cautious view ahead to the fourth quarter.

Xyratex, which sells its storage systems to makers of computer equipment and disk drives, had seen its earnings improve in recent quarters, bucking the trend.

Lower input costs helped push margins wider, aiding the company’s recovery from a series of quarters hobbled by weak demand and supply-chain problems.

But it warned last month that revenue in the latest quarter would be lower than initially expected.

The company said that is due to reduced demand from large customers for its storage, coupled with delays in rolling out its latest products.