Cipher Data Expects Flat Earnings in 3rd Quarter

Blaming a “shift in the timing of customer orders” of its computer tape-drive products, Cipher Data Products Inc. on Tuesday said that earnings and revenue for the third quarter ending March 31 will be flat compared to the second quarter.

However, the Scripps Ranch-based maker of magnetic tape peripherals still expects profits and revenue to increase more than 40% over last year’s third quarter. Cipher Data’s second-quarter profit was nearly $4.6 million, or 32 cents per share, on revenue of $47.3 million.

The company is “still on target” with most analysts’ predictions that fiscal 1985 revenue will approach $185 million and earnings will total between $1.30 and $1.40 per share, according to Norman R. Farquhar, Cipher’s vice president-strategic development.

Farquhar conceded, however, that “we’re on the lower end” of the earnings forecast.

The customer order “timing” shift is the result of the computer-products industry “stumbling over itself,” Farquhar said.

“There is a ‘just-in-time’ inventory mentality in the entire computer industry,” he said, referring to the Japanese inventory philosophy that calls for vendors to deliver parts just in time to be put on the assembly line.

“Our customers are keeping their ordering rate down, and that compresses the (sales) time frame,” Farquhar said.