Seagate Tech Guides Up
Updated from 4:48 p.m. EST
Sales to makers of consumer electronics devices continue to lift the fortunes of hard-drive maker Seagate Technology (STX), which posted the first quarter of $3 billion in revenue in the history of the industry.
Unlike most of the technology companies that have reported earnings in the last few weeks, Seagate delivered solid guidance. However, the company's bottom line was punished by acquisition-related charges that pushed net income down by 51%.
Even so, investors liked the second-quarter report, and in after-hours trading shares were up $1.02, or 3.9%, to $27.20.The Scotts Valley, Calif., company earned a profit of $140 million, or 23 cents a share, during the December quarter. Last year, Seagate posted a profit of $287 million, or 57 cents a share. Revenue was $2.99 billion, including $200 million from legacy Maxtor products, up 30% from last year's $2.3 billion in sales. Excluding $76 million in charges related to the Maxtor acquisition and $19 million for the early retirement of 8% notes, Seagate earned a profit of $236 million, or 39 cents a share. On that basis, the company easily surpassed Wall Street's expectations by 7 cents a share. Analysts were looking for sales of $2.92 billion. Looking to the third, or March, quarter, Seagate expects to return a non-GAAP profit ranging from 56 cents a share to 60 cents a share on sales ranging from $2.9 billion to $3 billion. Analysts were projecting an EPS of 54 cents on sales of $2.9 billion.
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