MTI Shares Dive After Loss Report

MTI Technology Corp. shares fell 42% on Wednesday, one of the largest percentage slumps in U.S. markets, after the Anaheim provider of high-performance data storage software and services reported a loss for the fiscal fourth quarter.

MTI stock fell 5.75 to $8 in Nasdaq trading of 5.7 million shares, more than nine times the average daily volume over the last three months.

The company reported an operating loss of $1.4 million, or 6 cents a share, for the quarter ended April 1. Analysts had estimated earnings of 12 cents a share, according to a survey by First Call/Thomson Financial.

Net income totaled $15.1 million, or 44 cents a share, but the figure included a $15.1-million tax benefit and $1.9 million in patent royalty payments. A year ago, the company earned $3.7 million, or 13 cents a share. Revenue increased 7.1% to $60.6 million.

MTI started a new commission and sales bonus plan last year, luring more Internet-related corporate customers. That cost MTI more in bonuses and commissions to its sales force.

“As revenue and margins increased throughout the year, we had to pay out more in the quarter,” said Dale Boyd, MTI’s chief financial officer.

MTI paid $3 million more in commissions and sales bonuses than in the previous quarter, he said. The company is starting a program to even out commission and bonus payments, he added.

For the year, MTI recorded net income of $26.2 million, or 79 cents a share, including the tax benefit and a $1.9-million loss from an investment and other charges. The company earned $10.1 million, or 34 cents a share, the previous year. Revenue rose 12.6% to $227.1 million.