Datalink Corp (DTLK), a provider of Data Center Solutions to Fortune 500 and mid-tier enterprises, announced its March 2011 quarterly report after the market close yesterday. Earnings, at 16 cents, came in 5 cents above the Street consensus estimate of 11 cents and revenue, at $85.7 million, also came in above the $79.5 million estimate. For the next June 2011 quarter, the company is projecting to generate $80 million to $86 million in revenue and 9 cents to 13 cents in non-GAAP earnings versus analyst estimates of $76.8 million and 10 cents.
Revenues and earnings are continuing to come in strong since the company reported its September 2010 quarter on October 19, 2010. This was followed by strong guidance on January 18, 2010 for the December 2010 quarter, and the price of the company’s shares as a result have risen from the $3.50s to just over $9 in early February. The shares closed yesterday at $6.23, prior to the company issuing its March 2011 quarterly report, with the recent weakness attributable mainly to the company issuing 2.75 million new shares for a 21% dilution of the then-existing shareholders.
The stock, as I've explained in much more detail in a prior article, “Datalink: Lesser Known, Lower Risk Data Storage Stock Exhibiting Strong Growth”, continues to offer an attractive alternative to play the ongoing explosion in data storage and virtualization needs compared to the more popular growth ‘names’ such as F5 Networks (FFIV) and Netapp (NTAP), both of whom have declined significantly since the beginning of the year versus the 40% plus increase in the price of DTLK shares (even more after canceling out the effect of the 21% dilution last month). This relative out-performance for DTLK versus FFIV and NTAP (not as much VMW, which reported ‘blow-out’ numbers Tuesday after the close) was highlighted in
