Legato Narrows Its Losses

The storage software firm announced flat revenue but a smaller loss for the first quarter of 2003.

Storage software firm Legato Systems Inc. announced flat revenue but with a much smaller loss for the first quarter of 2003, compared to the last quarter of 2002, officials said Tuesday.

Legato, of Mountain View, Calif., earned $74 million in the quarter, down from $76.6 million in the prior quarter, but up from $55.6 million a year ago.

Overall loss was $2.6 million, versus $10 million for the prior quarter, and $46.7 million a year ago.

"With the ongoing push for corporations to come into compliance with various regulations, our content and messaging solutions are gaining momentum," said David Wright, chairman and CEO, in a prepared statement. "In addition we were pleased to see… product announcements well received by partners and alliances," he said.

Legatos flagship software, Networker 7.0, debuted last month.

However, the product news was overshadowed by Legatos for-sale status, though no announcement has been made. Officials today acknowledged press coverage of the companys status but declined to provide an update.

Gary Abbott, an analyst with RTX Securities Corp., was pleased with todays results. "I thought the earnings in the first quarter were excellent. I think Legato probably gained market share. Its been a very long time," he said, in Newton Mass.

As for the possible change of ownership, "I think that whats changed… in the last six months is Legatos no longer in a position where they need to sell," Abbot said. "I think theyre quite frankly coming out of the woods. Why sell before you can reap," he noted.

Legatos main competitor, Veritas Software Corp., will announce its first-quarter earnings tomorrow.

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