The shifting preferences in the way corporations choose to store their data is having a negative impact on the margins of Eden Prairie-based Datalink. Efficiencies in cheaper flash array storage allows companies to buy more storage for less.
Lake Street Capital Markets analyst Eric Martinuzzi wrote in a note Thursday that Datalink's profit margins, which once had been around 22 percent, have declined to around 18 percent.
In Datalink's earnings release on Wednesday the company said that "volatility of current IT spending patterns" has led it to eliminate quarterly guidance for the near future. The company did provide yearly guidance saying that 2016 annual revenue will grow between 4 percent and 6 percent.
Martinuzzi wrote that "the outlook for 2016 revenue was better than we thought it was going to be." He is predicting Datalink's 2016 annual revenue will be $780 million but maintains a "hold" rating on Datalink.
Currency woes, pricing pressures affect Ecolab
Analysts from Zacks offered a sell rating on St. Paul-based Ecolab Inc. in a research note following its quarterly financial report. They wrote Wednesday that fourth-quarter 2015 results were impacted by foreign currency exchange rates and that a strengthening U.S. dollar and pricing pressures in Ecolab's energy segment will continue to impact the global provider of cleaning, sanitizing, food safety and infection prevention and energy products.
The analysts do expect some growth. "We believe that a robust product portfolio, new product launches and an expanding customer base will drive organic sales," they wrote.
Analyst: Silver Bay Realty an M&A target
