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Datalink stock sheds after it slashes Q3 forecast

Published: 03:57 06 Oct 2012 AEST

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Datalink Corp.'s (NASDAQ:DTLK) stock took a beating Friday after cutting its third-quarter profit and revenue forecasts, as its customers scaled back on spending. 

Shares were down 13.34 per cent to $7.43 on the Nasdaq on Friday afternoon. 

The Minnesota-based company, which offers data storage and back-up recovery services, said it now sees third-quarter sales of $105 to $106 million, with adjusted per share profits of 14 to 15 cents.

This compares to a prior view of $117 to $122 million in revenue, with adjusted per share profit of 20 to 25 cents. 

"We continue to see strong demand and a growing pipeline for our data center solutions, especially virtualized data center solutions and big data, as well as all aspects of storage," chief executive Paul F. Lidsky said in a statement. 

"However, we also continue to see our customers remain cautious regarding large capital expenditures, especially with the uncertainty surrounding the current economic environment."

Datalink is scheduled to report results, after markets close, on October 25. It also plans to hold a conference call. 

The virtual data centre provider also announced Friday that it officially acquired North Carolina-based IT firm Strategic Technologies.

The deal, initially announced on October 2, allows Datalink to focus on optimizing enterprise data and IT infrastructure while expanding its East Coast footprint. 

Datalink expects to book a $300,000, or one cent per share, charge in the fourth quarter due to the acquisition.

It also expects the deal to add to earnings within one quarter.

 

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