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Seagate earns to fall short
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January 7, 1998: 7:21 p.m. ET
Disk drive maker warns of lower earnings, restructuring charges
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NEW YORK (CNNfn) - Disk drive maker Seagate Technology Inc. Wednesday said continued pricing pressure and slower product demand will lead to a substantial second-quarter loss.
The company expects revenues to come in at $1.65 billion for the period ended Jan. 2, significantly less than first estimated.
Seagate (SEA) shares ended the day off 1/8 to 25-15/16. Shares were unchanged in after-hours trading.
Seagate, which did not release specific earnings projections, is scheduled to report final figures on January 20 after the market closes.
Analysts surveyed by First Call had expected the company to report a profit of 3 cents a share.
The Scotts Valley, Calif.-based company also said it expects to take more than $300 million in one-time charges -- $250 million of which will be taken in the second quarter. The remaining $50 million charge will be reflected in the third quarter.
Last month, Seagate, facing slow sales, said it would shut one of its plants in Clommel, Ireland, idling 1,400 workers.
Seagate is the second disk drive company to issue an earnings warning this week. On Tuesday, Read-Rite, a supplier of magnetic recording heads for computer disk drives, said it expects to report sales of $261 million for the fiscal first quarter, ended Dec. 28, 1997. That is only nominally higher than the $251.6 million sales in the first quarter of 1997.
Analysts attributed the lower sales and earnings to a temporary inventory glut in the disk-drive business.
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Seagate
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