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April 6, 2004

Seagate warns on third quarter

Disk vendor Seagate Technology said yesterday that it would not meet third quarter expectations, after demand was weaker than expected.

By CBR Staff Writer

Earnings per share are expected to be between $0.06 and $0.08 in the quarter ending April 2, excluding a $0.25 per share tax benefit, compared to the $0.20 to $0.30 per share previously expected.

The biggest blow to the figures came from the notebook disk sector. Seagate said excess purchasing in the December quarter had combined with a subsequent slowdown in notebook systems growth and a more concentrated customer base, leading to far fewer shipments than the company anticipated. The supply imbalance in the market could cause further uncertainty in the June quarter, the firm said.

Seagate also cited a reduction in sales of personal storage products into the distribution channel, after it decided to hold the line on pricing. Enterprise storage products were hit by an imbalance towards OEM customers, rather than the distribution channel , where pricing is more favorable.

Seagate did not comment on its revenue expectations for the quarter. The consensus forecast is for revenue of $1.52bn.

This article is based on material originally published by ComputerWire

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