Seagate Technology Inc issued a profit warning on Monday night, saying that weaker than anticipated demand for its disk drive products, combined with price deterioration in the market, would mean that it would not meet its earnings estimates for the fiscal fourth quarter, ending July 2nd. Seagate had been expecting earnings of $0.45 per share on a pro forma basis, after adjusting for its sale of Seagate Software’s NSMG network and storage management group to Veritas Software Corp. Now, excluding that sale, it expects earnings to be in the range of $0.32 to $0.37.
Revenue from all disk drive products may be approximately $100m or 6% below its fiscal third quarter results, the company said. And beyond its fourth quarter, due to be reported on Thursday, July 15, Seagate says is first fiscal quarter for 2000, ending October 1, will also be affected by the aggressive pricing environment for desktop disk drive products.
Seagate had only just clawed its way back to profitability in the third quarter after a dreadful 18 months that culminated in the loss of its co-founder and CEO Alan Shugart. Gross margins and operating margins in the disk drive and tape market had been rising for two quarters in a row. Last quarter, Seagate posted a profit of $82m, on revenue that rose 7.7% to $1.8bn. That compared with a $129m loss in the same period last year.
