LOS ANGELES:- Seagate TECHNOLOGY [] forecast margins and revenue for the current quarter well below Wall Street's expectations as prices and European consumer demand remain weak, sending its shares 4 percent lower.
The largest hard-drive company by revenue, which on Tuesday, July 20 also reported lower-than-expected results for its fiscal fourth quarter ended July 2, projected revenue of $2.7 billion to $2.9 billion in the September quarter, lagging average estimates for more than $3 billion.
Gross margins in the quarter would be at the low end of its previously anticipated range of 22 percent to 26 percent for 2010. Wall Street had been expecting more than 27 percent.
"We're going to have higher pricing (erosion) and higher production cost," Patrick O'Malley, executive vice president and chief financial officer for Seagate, told Reuters.
Seagate said its fiscal fourth-quarter hard drive sales were hurt by the debt crisis in Europe.
"As the euro recovers in a meaningful way, we certainly expect the European consumer to come back," O'Malley said.
The company reported net income of $379 million in the fiscal fourth quarter, or 76 cents a share, after a net loss of $83 million, or 17 cents a share, in the year-ago period.
Excluding items, the company posted earnings per share of 70 cents, lagging the 77 cents expected according to Thomson Reuters I/B/E/S.
Revenue rose about 13 percent to $2.66 billion. But that fell short of the $2.85 billion expected by Wall Street.
Its gross margin for the fourth quarter was 27.4 percent.
Shares in Seagate, which competes with Western Digital, slid 5 percent in the week leading up to its earnings report, as analysts reduced their price targets for the stock over concerns about waning consumer demand in Europe and the United States.
The stock dropped another 4 percent to $13.96 in after-hours trade, from a close of $14.53 on Nasdaq.
"Everybody kind of knew that things are really bad. If the stock goes up tomorrow it will be a relief rally," said Kaushik Roy, analyst with Wedbush Securities. - Reuters
The largest hard-drive company by revenue, which on Tuesday, July 20 also reported lower-than-expected results for its fiscal fourth quarter ended July 2, projected revenue of $2.7 billion to $2.9 billion in the September quarter, lagging average estimates for more than $3 billion.
Gross margins in the quarter would be at the low end of its previously anticipated range of 22 percent to 26 percent for 2010. Wall Street had been expecting more than 27 percent.
"We're going to have higher pricing (erosion) and higher production cost," Patrick O'Malley, executive vice president and chief financial officer for Seagate, told Reuters.
Seagate said its fiscal fourth-quarter hard drive sales were hurt by the debt crisis in Europe.
"As the euro recovers in a meaningful way, we certainly expect the European consumer to come back," O'Malley said.
The company reported net income of $379 million in the fiscal fourth quarter, or 76 cents a share, after a net loss of $83 million, or 17 cents a share, in the year-ago period.
Excluding items, the company posted earnings per share of 70 cents, lagging the 77 cents expected according to Thomson Reuters I/B/E/S.
Revenue rose about 13 percent to $2.66 billion. But that fell short of the $2.85 billion expected by Wall Street.
Its gross margin for the fourth quarter was 27.4 percent.
Shares in Seagate, which competes with Western Digital, slid 5 percent in the week leading up to its earnings report, as analysts reduced their price targets for the stock over concerns about waning consumer demand in Europe and the United States.
The stock dropped another 4 percent to $13.96 in after-hours trade, from a close of $14.53 on Nasdaq.
"Everybody kind of knew that things are really bad. If the stock goes up tomorrow it will be a relief rally," said Kaushik Roy, analyst with Wedbush Securities. - Reuters
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