Seagate ( STX ) managed to beat its earnings estimate in the first quarter but indictated its profits in the second quarter will fall below Wall Street estimates as it adjusts to a slowdown in tech spending. The disk-drive specialist, which reported its first-quarter results after market close, expects second-quarter revenue between $2.85 billion and $3.05 billion, and diluted net income per share between 12 cents and 16 cents. Wall Street had estimated revenues of $3.25 billion and earnings of 36 cents, although Seagate's second quarter estimate includes charges of $34 million, or 7 cents a share, related to restructuring and recent acquisitions. Seagate's first-quarter revenues also dipped below analyst estimates and its profits tumbled amidst growing uncertainty about tech sector spending. The disk-drive specialist reported net income of $60 million, or 12 cents a share, compared to $355 million, or 64 cents a share, in the same period last year. Excluding charges and one-time items, Seagate would have reported net income of $131 million and earnings or 26 cents a share. Seagate's first quarter revenues were $3.03 billion, down from $3.285 billion in the same period last year. Analysts had predicted revenues of $3.16 billion and earnings of 22 cents. Seagate is currently facing intense competition and tight profit margins in the hard disk drive market, where it is up against the likes of Fujitsu and Hitachi ( HIT ). "Looking forward, in the face of a challenging macro-economic environment, we will focus on cost controls and inventory management," said Bill Watkins, the Seagate CEO, in a statement Wednesday. "We remain highly confident in our ability to convert the long-term growth in demand for storage into superior value for our shareholders."
Seagate's shares dropped 45 cents, or 5.62%, to $7.55 in extended trading.