Seagate Q4 earnings miss estimates, lowers Q1 outlook

Seagate Technology (NASDAQ:STX) posted fourth quarter results Monday that missed initial expectations, causing shares to tumble almost 10 per cent in pre-market trading.

For the fourth quarter that ended June 29, the hard-drive maker reported profit of $1.0 billion, or $2.37 per diluted share, up from $119 million, or 27 cents per diluted share in the fourth quarter of 2011.

Excluding items, fourth quarter earnings were $2.46 per share, compared to 28 cents per share in last year’s period.

Sales met the company’s revised fourth quarter forecast of $4.5 billion provided at the start of July, down from its initial expectation of $5.0 billion. Fourth quarter revenues totalled $2.9 billion in 2011.

Shares of Seagate were down 9.92 per cent to $30.34 on the NASDAQ Tuesday Morning.

"As we announced previously, we were disappointed not to meet our revenue and margin plan for the fourth quarter as a result of the industry's faster recovery from the supply chain disruption and an isolated supplier issue that we experienced," Seagate’s chairman and CEO Steve Luczo said.

"Nevertheless, we are pleased to have achieved record revenue and unit shipments for the June quarter, which enabled Seagate to continue to return significant value to shareholders through dividends and share repurchases."

Gross margin for the quarter totalled 33.1 per cent and 33.6 per cent on an adjusted basis, meeting the company’s revised expectations. Seagate previously forecasted gross margin of 34.5 per cent.

Seagate's board approved a quarterly cash dividend of 32 cents per share, payable on August 29 to shareholders of record as of the close of business on August 14.

Looking ahead, Seagate said it expects first-quarter sales of about $4 billion, less than the $4.62 billion expected by analysts, according to Thomson Reuters.