Storage maker EMC's shares jumped almost 16 per cent to $16.85 after the company announced a narrower than expected loss in the fourth quarter, and claimed solid improvements in its information storage and software services units.
After expecting to see a profit in the second half of the year, the company said this may now happen in the second quarter.
Chief executive Joseph Tucci emphasised that EMC ended its fiscal year with positive momentum, having increased total consolidated revenue by 25 per cent from the third to the fourth quarters.
Tucci said that, while software sales fell from the year-earlier period, they increased 46 per cent from the third quarter.
Just the same, the company had recently become the subject of takeover speculation when it announced a major restructuring last year.
Rumours of a mega-merger with IBM passed through the storage industry as it faced the type of downturn that often results in significant consolidation.
EMC, which has slashed prices to compete with Hitachi and IBM, also reduced its workforce to 19,000 in 2001.
According to Tucci, 75 per cent of the 4000 layoffs have been completed with the balance to come in its international divisions early this year.
EMC reported a net loss of £49m ($70m), or three cents per share, for the fourth quarter ended 31 December. This compares with net income of £395.9m ($562.8m), or 25 cents per share, in the fourth quarter of 2000.
The company's revenue in the fourth quarter was down significantly to £1.06bn ($1.51bn), compared to £1.84bn ($2.62bn) in the same quarter the previous year.
EMC projects a revenue decline of five per cent in the first quarter sequentially, but said it is "poised very well for profitability in the second half of the year".
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