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Seagate Shares Slide on Q1 Miss (Update 1)

This story has been updated with comments from Seagate CFO Pat O'Malley, the company's outlook and updated share price.

NEW YORK ( TheStreet) - Seagate (STX - Get Report) shares slid in extended trading, weighed down by the company's top and bottom-line miss in its first-quarter results.

The Cupertino, Calif.-based firm reported revenue of $3.5 billion, down from $3.7 billion in the prior year's quarter. Analysts surveyed by Thomson Reuters were looking for sales of $3.56 billion.

Excluding items, Seagate earned $1.29 a share on net income of $473 million, down from $1.45 a share on net income of $594 million in the same period last year, and just below analysts' forecast of $1.30 a share.

However, Seagate CFO Pat O'Malley told TheStreet that profits were lifted in last year's quarter thanks to the lingering effects of Thailand's 2011 floods. "That was the last of the quarters where the flood impacted," he said. "There was pricing leverage because there wasn't full supply out there."

On a non-GAAP basis, the company's gross margin was 28.5% during its most recent quarter, compared to 29% in the prior year's quarter.

For the second quarter, Seagate predicts revenue between $3.5 billion and $3.6 billion, slightly below Wall Street's forecast of $3.64 billion. The company also expects to report a relatively flat gross margin.

Seagate shares, which closed up 0.1% at $49.85 during Monday's session, tumbled 4.51% to $47.60 in extended trading.

Seagate, which generated $682 million in operating cash flow during the quarter, will increase its dividend from 38 cents a share to 43 cents a share. The dividend will be payable on Nov. 26, 2013 to shareholders of record as of the close of business on Nov. 12, 2013

"While the challenges of technology transitions and macro uncertainty are driving us to manage our business conservatively, we remain focused on the fact that the demand for exabytes of storage continues to increase," said Steve Luczo, Seagate's chairman and chief executive officer, in the company's press release

--Written by James Rogers in New York.

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