Seagate not spinning as well as hoped

SCOTTS VALLEY, Calif.– Seagate Technology said it expects revenue for the third quarter that ended March 30 won’t meet expectations.

Revenue for the quarter is now expected to be approximately US$2.8 billion, compared to prior guidance of between $2.9 billion and US$3.0 billion, the company said in a news release.

It also said GAAP and non-GAAP gross margins did not achieve the company’s expectations.

Details will be announced April 17 following the close of the market.

Primary factors impacting revenue and profitability, which became evident toward the end of March, were a lower than expected industry demand for 3.5-inch ATA disc drives and a more aggressive than planned pricing environment for high capacity 3.5-inch ATA disc drives, the release said.

It also said the company believes that its market share, both in total and within each market currently served, is virtually unchanged from the previous quarter. Further, Seagate’s inventories on-hand in the distribution channel are under five weeks.

“Overall, the company’s results continue to be healthy and are reflective of its leadership position in an industry where consumers and applications are using, creating and sharing digital content at an accelerating pace,” the release said.

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Jim Love, Chief Content Officer, IT World Canada

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