Seagate Profit Falls 27%

(RTTNews) - Hard-disk drive maker Seagate Technology plc (STX) said Monday after the markets closed that its first quarter profit fell 27% from last year, as revenue dropped due to a weak PC market.

The company's quarterly earnings per share, excluding items, also came in below analysts' expectations as did its quarterly revenue.

"The solid financial results we achieved this quarter reflect the ongoing execution of our business model," said Steve Luczo, Seagate's chairman and chief executive officer. "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."

Seagate shares are currently losing 4.69% in after hours trading after closing the day's regular trading session at $49.85, up 5 cents. The shares trade in a 52-week range of $24.90 to $50.55.

For the first quarter ended September 27, 2013, the company reported net income of $427 million or $1.16 per share, compared to $582 million or $1.42 per share for the year-ago quarter.

Excluding items, adjusted net income for the first quarter was $473 million or $1.29 per share, compared to $594 million or $1.45 per share in the prior year quarter.

On average, 24 analysts polled by Thomson Reuters expected the company to earn $1.30 per share for the first quarter.

Revenue for the first quarter fell 6.4% to $3.49 billion from $3.73 billion in the same quarter last year. Twenty-two analysts had a consensus revenue estimate of $3.56 billion for the first quarter.

Gross margin for the quarter narrowed to 28.0% from 28.4% a year earlier.

During the first quarter, the company repurchased 4 million ordinary shares for about $182 million. Subsequent to the first quarter, Seagate repurchased 32.7 million ordinary shares from Samsung Electronics Co., Ltd. for about $1.5 billion. Seagate said its Board of Directors has approved an increase in the quarterly cash dividend by about 13% from $0.38 per share in the previous quarter to $0.43 per share this quarter. The dividend will be payable on November 26 to shareholders of record on November 12.

Seagate also announced two strategic executive appointments. Dave Mosley, who most recently served as Executive Vice President of Operations and R&D, has been named President, Operations and Technology. Rocky Pimentel, who most recently served as Executive Vice President and Chief Sales and Marketing Officer, has been appointed President, Global Markets and Customers. Both will continue to report to CEO Luczo.

Rival Western Digital Corp. (WDC) last week reported first quarter profit that fell 5% from last year, as revenue dropped 6%. However, the company's quarterly earnings per share, excluding items, came in above analysts' expectations as did its quarterly revenue.