Tech Industry

Seagate shares down 12%

The company's stock drops more than 12 percent after it announced that it was expecting weak quarterly results.

Seagate Technology's (SEG) stock today dropped 12.65 percent, a day after the company announced that weakness in customer demand would cut into profits this quarter.

The disk drive maker's stock dropped to 36-1/4 from yesterday's close of 41-1/2.

Gruntal & Company lowered its fourth-quarter earnings estimate to 65 cents a share from 96 cents a share, and cut fiscal 1997 estimates to $3.02 from $3.33. Hambrecht & Quist cut its rating to "hold" from "buy."

After the markets closed yesterday, the company warned that its fourth-quarter results are expected to fall below expectations due to continued weakness in demand for its high-end products and internal production issues.

In a statement, the leading disk drive maker said it no longer expects to achieve the forecast it offered to investors only two weeks ago, adding that revenues for the quarter that ended June 27 are now expected to be between $2.0 billion and $2.1 billion with a "significant impact" on earnings.

On June 2, Seagate said fourth-quarter operating earnings were likely to fall short of its third-quarter profits of $1.01 a share. In its revised outlook, the company did not provide a specific range for earnings.

According to First Call, which monitors earnings expectations, analysts had expected Seagate to report a profit of 94 cents a share for the fourth quarter.

In the year-ago quarter, Seagate reported a profit of $101 million, or 84 cents per share, on revenues of $2.0 billion. Those figures preceded a 2-for-1 stock split.

Reuters contributed to this report.