Seagate Fourth-Quarter Sales, Gross Margin Miss Forecasts
Seagate Technology Plc (STX) said fiscal fourth-quarter sales and profit margin would miss the company’s previous forecast, citing reduced hard-drive shipments and a “supplier quality issue” that affected some products.
Seagate, the world’s largest maker of computer disk drives, expects to report fiscal fourth-quarter sales of $4.5 billion and gross margin, excluding certain items, of 33.6 percent -- lower than its previous forecast for sales of at least $5 billion and gross margin of 34.5 percent. The average estimate of analysts surveyed by Bloomberg was for $4.88 billion in sales and 34.7 percent gross margin.
The company in a statement cited reduced shipments in response to competitors’ faster-than-expected recovery from supply-chain disruptions and “an isolated supplier quality issue” that affected about 1.5 million of its enterprise storage products.
Seagate spokesman Brian Ziel said in an e-mail that the reduction in shipments was related to last year’s flooding in Thailand. The floods affected suppliers to Seagate’s factories in the country, and rival Western Digital Corp. (WDC) suspended production for a time because of the floods.
Ziel declined to specify the quality problem or the supplier in question, saying the issue “is behind us now.”
Seagate Chief Executive Officer Steve Luczo said in the statement that the company is “approaching the September quarter conservatively” and planning for “relatively flat” demand in the period.
Shares of Dublin-based Seagate fell 0.5 percent to $24.96 at the close in New York. The stock has gained 52 percent this year.
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