Iomega slips on latest profit warning

Iomega Corp. drifted lower Friday after the company warned of a second quarter loss due to slack sales of its Zip and Jaz products. The company also said it would cut as much as 10 percent of its workforce.

Shares fell 3/8 to 4, or 9 percent, in early trading.

The company is forecasting losses in the range of 5 cents to 10 cents per share on lower revenues. And that projection excludes a second quarter charge.

Iomega was expected to break even in the quarter ending June 27, according to First Call Corp. Iomega said a continued weakness in its Jaz drive and disk sales and a delay in shipment of its new Clik! PC Card drive were at fault.

Iomega plans to cut 450 jobs and take a $45m (£27.4m) charge, or 11 cents a share, in the quarter in a bid to shore up profits. The company has 4,800 employees. It also plans to close facilities in California, and consolidate operations in France and Scotland. The restructuring is expected to generate almost $40m in annual cost savings.