Iomega returned total net earnings of $34.7 million (on $614.4 million revenues) in its 2002 financial year, the company has announced.

In 2001, the one-time storage-solutions market leader lost $93.3 million on $831.1 million income.

The 2002 figures include charges (and receipts) relating to the sale of its Malaysian manufacturing subsidiary. The figures also integrate a one time $15.3 million tax refund.

Fourth-quarter income ($23.2 million) included $7.5 million of favorable changes in estimates of accruals for marketing and sales programs, and a gain of $2.9 million from the settlement of a legal dispute.

Despite positive financial performance, the company did see decreased Zip and Jaz sales, though these were partially offset by increased sales of portable and desktop hard drives and network-storage solutions.

During the last quarter of 2002, Iomega's Zip drive revenues fell $33.6 million (23.3 per cent) with 0.9 million units shipped ? 5.7 million Zip discs shipped. Iomega's CD-RW solution sales also fell, while Jaz drive revenues fell to $2.3 million from $11.4 million in the fourth quarter 2001.

The company achieved higher revenues from its external hard drive products, with the exception of its Peerless drive, sales of which declined to $1.7 million from $6 million year-on-year.

However, stock market message boards are buzzing with comments hinting the company may appear ripe for a takeover bid - its stock market valuation is $483.4 million. Iomega's total cash, cash equivalents and investments rose $63.5 million to $453.9 million as of December 31, 2002.

Iomega president and CEO Werner Heid said: "Looking ahead into 2003, we must realistically expect continued revenue declines in the Zip product line."