Fusion-io Shares Tumble On Q1 Loss, Weak Sales Outlook; CFO To Leave

(RTTNews) - Shares of Fusion-io, Inc. (FIO) plunged more than 10 percent in extended trades Wednesday after the storage drive maker reported a loss for the first quarter and provided sales guidance for the second quarter well below Street view.

The company also said that Chief Financial Officer and Executive Vice President Dennis Wolf will be leaving after a period of transition to pursue an opportunity at a private company. In addition, Chief Sales Officer and Executive Vice President James Dawson is retiring from the company.

Fusion-io reported a loss for the first quarter, reflecting lower revenue and higher expenses. However, adjusted loss per share came in narrower than analysts' expectations and quarterly sales beat their estimates.

The Salt Lake, Utah-based company reported net loss for the first quarter of $27.90 million or $0.28 per share, compared to net income of $3.93 million or $0.04 per share in the prior-year quarter.

Excluding items, adjusted net loss for the quarter was $6.67 million or $0.07 per share, compared to adjusted net income of $14.92 million or $0.14 per share in the year-ago quarter. On average, 25 analysts polled by Thomson Reuters expected the company to report a loss of $0.11 per share for the quarter. Analysts' estimates typically exclude special items.

Revenue for the quarter declined 27 percent to $86.29 million from $118.12 million in the same quarter last year, but beat analysts' consensus estimate of $84.73 million.

Gross margin for the quarter declined to 57.7 percent from last year's 59.3 percent. Total operating expenses increased to $77.56 million from $61.60 million from last year. Operating margin was a negative 32.2 percent, compared to positive 7.2 percent.

Looking ahead to the second quarter, Fusion-io expects revenue to be up slightly sequentially. Analysts expect the company to report revenues of $113.84 million.

In a separate statement, Fusion-io said it has appointed Dr. Edward H. Frank to its board of directors effective October 21, 2013. Dr. Frank , aged 56, recently retired as vice president of Macintosh Hardware Systems Engineering at Apple, Inc. (AAPL).

Fusion-io also said that a search for the replacement to CFO Dennis Wolf is underway. The company also expects to announce a replacement for Chief Sales Officer Dawson shortly.

Fusion-io also said that Gary Smerdon, former senior vice president and general manager of the accelerated solutions division at LSI Corp., recently joined Fusion-io as executive vice president and chief strategy officer.

The company's additional recent hires include Robert Hon, former senior vice president of engineering at Echelon Corporation, who joined Fusion-io as senior vice president of research and development, and Keith Brown, former vice president of enterprise applications and architecture at Aflac Incorporated, who joined Fusion-io as chief information officer.

FIO closed Wednesday's regular trading session at $12.98, down $0.27 or 2.04 percent on a volume of 6.63 million shares. In after-hours, the stock further declined $1.39 or 10.71 percent to $11.59.