Suit and Tie Beats Mullet Today

The computing industry is changing -- but only on the consumer side. In the enterprise IT world, it's business as usual.

If you want proof, just look at today's headlines. Memory-chip maker Micron Technology (Nasdaq: MU  ) is falling like a wounded swan, blaming weak demand for consumer PC systems all the way down. IBM (NYSE: IBM  ) just passed Microsoft's market valuation for the first time in a decade and a half -- Big Blue is all business while Redmond wears a mullet.

And then you have Xyratex (Nasdaq: XRTX  ) soaring as much as 11.9% on a terrific third-quarter report. This awkwardly spelled company makes storage systems and components for enterprise IT shops such as EMC (NYSE: EMC  ) , NetApp (Nasdaq: NTAP  ) , and, indeed, IBM. Both sales and earnings dwindled year over year, so it's not all wine and roses. But with revenue of $362 million and non-GAAP earnings of $0.42 per share, the company left Wall Street's expectations of $353 million and $0.17 per share far behind. And that's after absorbing $1 million of bad debt issued to failed solar-power specialist Solyndra.

Looking ahead, Xyratex's customers are holding back some of their orders while regulators ponder the proposed big-ticket merger between Western Digital (NYSE: WDC  ) and Hitachi Data Systems on one side, Seagate Technology (Nasdaq: STX  ) and Samsung's hard drive operations on the other. Once these transactions shake out, as I'm sure they will, the storage industry can accelerate again. Everybody hates uncertainty, you know.

Fool contributor Anders Bylund owns shares of Micron Technology, but he holds no other position in any company mentioned. Check out his holdings and short bio. The Motley Fool owns shares of EMC, IBM, Western Digital, and Microsoft. Motley Fool newsletter services have recommended buying shares of and creating a bull call spread position in Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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