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Seagate Expects to Report Big 2nd-Quarter Loss

January 08, 1998|Reuters

Seagate Technology Inc. said that it will report a substantial operating loss in its second quarter due to severe pricing pressure and weaker than expected disk drive demand. The world's largest disk drive maker had already warned in November that it expected a shortfall for the quarter. It said it expects to report restructuring and other charges of $250 million for the quarter ended Jan. 2. "Revenues from [disk] drive operations were significantly less than previously anticipated and are currently estimated to be approximately $1.5 billion for the quarter," the company said in a statement. Total revenue, which includes software, service and support, is projected to be $1.65 billion, it said. That compares with $2.4 billion a year ago. Even after Seagate's earlier warning, analysts had expected the disk drive maker to earn 3 cents a share for the second quarter, down from 84 cents a share a year ago. Seagate made the announcement after the market closed. Earlier, shares of Scotts Valley-based Seagate fell $1.25 to close at $20.63 on the New York Stock Exchange. All three of the top disk drive makers--Seagate, Quantum Corp. and Western Digital Corp.--have sent distress signals in recent weeks as a glut on the market for disk drives has sent prices into a tailspin.

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