Seagate shares retreat after earnings miss

AP News
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Posted: Jul 31, 2012 9:33 AM
Seagate shares retreat after earnings miss

NEW YORK (AP) — Shares of hard-drive maker Seagate Technology PLC fell in premarket trading Tuesday, giving up gains from a recent rally, after the company gave a cautious forecast.

The Cupertino, Calif.-based company's stock was down $2.53, or 8.3 percent, at $27.90. The stock traded lower as recently as Wednesday.

Late Monday, Seagate said it earned $1.01 billion, or $2.37 per share, in the April-through-June period, its fiscal fourth quarter. That was up from $119 million, or 27 cents per share, a year earlier.

Revenue rose 57 percent to $4.48 billion from $2.86 billion.

The results missed analyst expectations slightly, but were in line with Seagate's own forecast from early July. It warned investors then that its revenue wouldn't meet forecasts because it shipped fewer hard drives than expected as the industry bounced back from flooding in Thailand at the end of 2011.

For the current quarter, Seagate said it expects revenue of $4 billion, well below the $4.5 billion analysts were expecting. It blamed, in part, delays in PC shipments with the approaching launch of Windows 8.

Analyst Aaron Raker at Stifel Nicolaus said the revenue forecast was disappointing, but concluded that the company is pointing to higher gross margins. He raised his earnings forecast for the company for the just-started fiscal year and the next one, even as he trimmed his revenue estimates.