Seagate Technology Results Hurt by Weak Demand
April 29 2016 - 12:00PM
Dow Jones News
Seagate Technology PLC swung to a loss in its latest quarter
amid waning demand for its storage products.
Chief Executive Steve Luczo said results fell short of the
company's expectations "as a result of several near-term demand
factors," calling current dynamics "challenging."
Earlier this month, the Cupertino, Calif., data-storage company
warned that results would fall short of estimates because of
lower-than-expected demand for enterprise disk drives and
desktop-client products, primarily in China. At the time, Mr. Luczo
said Seagate was in the midst of a review that would result in
changes to be implemented over the next several quarters.
"We are aggressively working to position Seagate to respond to
new demand levels and are committed to ongoing financial
discipline," the CEO said Friday.
Western Digital Corp., which is in the process of acquiring
SanDisk, also has seen its results weaken. On Thursday, Western
Digital said its earnings plummeted 81% in its latest quarter.
Both companies saw their stock prices continue to slide Friday,
with Seagate shares falling 16% to $22.57, and Western Digital
dropping 14% to $39.74. Both stocks have fallen more than 50% over
the past year.
For Seagate's latest quarter, the company reported a loss of $21
million, or seven cents a share, down from a year-earlier profit of
$291 million, or 88 cents a share. Excluding restructuring
expenses, among other items, earnings fell to 22 cents a share from
$1.57.
Revenue dropped 22% to $2.60 billion. Analysts had projected 37
cents in adjusted per-share profit on $2.60 billion in sales,
according to Thomson Reuters.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
(END) Dow Jones Newswires
April 29, 2016 12:45 ET (16:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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