Seagate Technology Results Hurt by Weak Demand

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 [e-mail]

(END) Dow Jones Newswires

April 29, 2016 12:45 ET (16:45 GMT)

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