By Nathalie Tadena
Hard-disk-drive maker Seagate Technology PLC (STX) cut its
revenue and gross-margin expectations for its fiscal fourth
quarter, pointing to a reduction in shipments in response to the
industry's recovery from last year's floods in Thailand and a
supplier-quality issue.
Shares of Seagate, one of the biggest providers of hard-disk
drives, sank 5.7% to $23.69 after hours. Through the close, the
stock has climbed 53% since the start of the year.
Chief Executive Steve Luczo said the company didn't achieve its
planned market-share growth in the latest quarter as it reduced
shipments in response to the industry's faster-than-expected
recovery from its supply-chain disruption. Mr. Luczo also noted the
company experienced an isolated supplier-quality issue that
impacted enterprise-unit shipments by approximately 1.5 million
units and drove adjusted gross margin below its targets. The
company, however, said it suspended shipments of the affected
products and has resolved the issue.
For the quarter ended June 29, the company now expects revenue
of about $4.5 billion and adjusted gross margin of 33.6%. Its prior
view called for revenue of at least $5 billion and adjusted gross
margin of at least 34.5%.
"Based on the macroeconomic concerns indicated by a broad base
of customers, we are approaching the September quarter
conservatively and aligning our business for a relatively flat
addressable market and modest improvements in our product mix," Mr.
Luczo said.
The company expects average selling prices and margins to remain
relatively stable in its first quarter.
Seagate had been benefiting from rivals' woes following severe
flooding in Thailand that hindered drive manufacturing. Seagate
recently boosted its share of the industry with its purchase of
Samsung Electronics Co.'s (SSNHY, 005930.SE) hard-drive business.
In May, it unveiled its plans to buy LaCie SA (LAC.FR) for roughly
146 million euros ($182 million), as the hard-drive maker looks to
boost its presence in the consumer-storage market.
In April, Seagate reported its fiscal third-quarter earnings
surged for a second-consecutive quarter, again topping analysts'
expectations, as the maker of hard drives experienced pent-up
demand and higher prices for drives that continued to support
soaring results.
Seagate plans to reports its fourth-quarter results July 30.
Write to Nathalie Tadena at nathalie.tadena@dowjones.com