Seagate Profit Triples, Disks in Tight Supply

Seagate Technology on Thursday reported a near tripling of quarterly profit, fueled by mounting demand for hard disk drives from businesses and consumers that left its plants short of supply.

But shares fell as much as 8 percent in extended trade as Seagate posted revenue of $3.42 billion -- up 14 percent, but short of the $3.49 billion, on average, that Wall Street analysts were forecasting, according to Reuters Estimates.

For much of the second-fiscal quarter, the company has said it could only supply a percentage of the hard disks sought by computer and gadget makers as demand outstripped its factory capacity. Disk shipments rose 20 percent from a year ago to 50 million units.

Seagate said it expects revenue for the fiscal third quarter ending in March of $3.2 billion to $3.3 billion, a increase of roughly 15 percent from the year-earlier quarter.

Wall Street had been looking for March quarter revenue of $3.31 billion, with forecasts ranging between $3.18 billion to $3.55 billion, according to Reuters Estimates.

Analysts, on average, were predicting a net profit of 56 cents a share and a profit excluding one-time items of 62 cents for the March quarter, the survey showed.

Shares of Seagate closed down 6 percent at $21.60 ahead of the report on the New York Stock Exchange. Following the results, which came after the regular trading session, the stock fell another 8 percent to $19.86. Seagate shares are off 21 percent year-to-date.

The world's data storage market leader posted a net profit for the second-fiscal quarter ended December 28 of $403 million, or 73 cents per diluted share, compared with the year ago quarter's profit of $140 million, or 23 cents per share.

The latest quarter's profit included a merger-related charge of $31 million and an asset-sale gain of about $15 million. The year-earlier period included about $95 million in charges for its Maxtor acquisition and early debt-retirement.

Excluding the charge and gain, the company had a profit of $419 million, or 76 cents a share. Both net results and results excluding items include a restructuring charge of $27 million, or 5 cents a share.

Analysts were looking for a second-fiscal quarter net profit of 70 cents per share, according to Reuters Estimates. Excluding stock option expense and one-time items to cover merger costs, the analyst consensus was 75 cents a share, the survey showed.

Fifteen analysts have some form of buy rating on Seagate stock. Ten recommend investors hold, but not buy more shares.

Seagate is based in the Cayman Islands but its operations are run from Scotts Valley, Calif., south of Silicon Valley.