Seagate Upgrade SAN FRANCISCO, Jan. 12 /PRNewswire/ -- We are raising Seagate to a hold based on the recent sales strength in the PC and consumer electronics segments for drives and the expectations for a strong March quarter. Seagate's recent new product introductions are also having a positive impact on the firm. While we view the stock now as fairly to fully priced based on the revised consensus 2005 estimates, we are expecting to see both revenue and earnings growth in fiscal 2006. We now expect Seagate to post a net income in fiscal 2006 of $0.90 per diluted share, on revenues of $7.26 billion. Pressure from expected future secondary share offerings could continue to limit upside potential. All expressions of opinion reflect the judgment of the Research Department of Hoefer & Arnett, Inc. at this date and are subject to change. We have obtained information from sources considered reliable, but we do not guarantee that the foregoing report is accurate or complete. Other departments of Hoefer & Arnett, Inc may have information, which is not available to the Research Department about companies mentioned in this report. Hoefer & Arnett, Inc., or its affiliates may execute transactions in the securities mentioned in this report, which may not be consistent with the report's conclusions. Hoefer & Arnett, Inc. may perform investment banking or other services for, or solicit investment-banking business from any company mentioned in this report. Partners, officers, employees and accounts controlled by Hoefer & Arnett, Inc. may own shares of any company mentioned herein. Hoefer and Arnett makes a market in this stock. The Analyst certifies that the views expressed in this research report accurately reflect his personal views about the subject company and its securities. He also certifies that he has not been, is not, and will not be receiving direct or indirect compensation related to his views expressed or any specific recommendations that are contained in this report. Neither the Analyst nor any member of his family holds a position in Seagate. Hoefer & Arnett Incorporated is a member of the National Association of Securities Dealers, CRD number 10883. DATASOURCE: Hoefer & Arnett Incorporated CONTACT: Mark Miller of Hoefer & Arnett Incorporated, +1-800-346-5544, ext. 731 Web site: http://www.hoeferarnett.com/

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