Seagate Tanking Disk Drives & Storage (STX, WDC)

Investing

Published: July 15, 2008 4:27 pm

Seagate Technology (NYSE: STX) is seeing some pain after the storage device and disk drive maker said results were going to fall short of current Street estimates.

The company said income fell 70% to $160 million, or $0.32 EPS (was $0.44 non-GAAP), on a 5.6% gain in revenues to $2.9 billion. We had First Call estimates at $0.42 on $2.89 Billion in revenues. Shipments during the quarter grew 10% year over year to 43 million.

Seagate’s fiscal Q1 guidance was the scourge here with revenues expected to be $3.15 to $3.3 billion and non-GAAP EPS at $0.22 to $0.26. This is a huge disappointment to First Call’s estimates of $3.23 Billion and $0.58.

Shares closed up 1.3% at $17.30 in regular trading but shares are now down almost 8% at $15.92 in after-hours trading. With a prior range of $16.50 to $28.91, you can count that as a new 52-week low.

Its key competitor is Western Digital Corp. (NYSE: WDC), who is expected to report earnings on July 24. Western Digital shares closed up 0.3% at $33.88 in regular trading and its shares were down over 4% at $32.39 in after-hours in sympathy.

Jon C. Ogg
July 15, 2008

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