* Second-quarter adj EPS $1.32 vs est $1.38
* Revenue $3.53 bln vs est $3.56 bln
* Shares down 7 pct in extended trading
By Lehar Maan
Jan 27 Hard-disk drive maker Seagate Technology
Plc's second-quarter results missed analysts' estimates
as growth slowed in its cloud storage business, sending its
shares down 7 percent in extended trading.
Weakness in the cloud business was due to long-term rollouts
by some of its original-equipment manufacturer customers, with
shipments down "a couple of hundred thousand units", Chief
Financial Officer Pat O'Malley told Reuters.
OEMs had accounted for about 68 percent of the company's
total revenue as of June, according to a regulatory filing.
O'Malley, who counts Google among Seagate's
customers, said cloud comprised 10-15 percent of its total
revenue in the second quarter ended Dec. 27.
The finance chief said he expects the cloud business to
contribute about 20 percent to the company's total revenue by
the end of the year.
Seagate and rival Western Digital Corp are tapping
into the growing demand for products that help store data in the
cloud and reducing their dependence on personal computer hard
drives as consumers shift to smartphones and tablets.
Global PC shipments fell 10 percent last year, the worst
annual drop since research firm Gartner began tracking them.
Seagate also forecast current-quarter revenue of $3.4
billion. Analysts on average were expecting $3.46 billion.
"They lost on the enterprise, which is the higher-margin
category," FBN Securities analyst Shebly Seyrafi said.
"The strength in client non-compute was not enough to offset
the weakness in enterprise," he added.
The enterprise category comprises the cloud business, while
the client non-compute business provides storage devices for
consumer electronics such as gaming consoles and digital video
Western Digital last week reported a better-than-expected
quarterly profit, helped by sales of higher-margin data storage
Seagate's net income fell to $428 million, or $1.24 per
share in the second quarter ended Dec. 27, from $492 million, or
$1.30 per share, a year earlier.
Excluding items, the company earned $1.32 per share.
Revenue fell about 4 percent to $3.53 billion.
Analysts had expected a profit of $1.38 per share on sales
of $3.56 billion, according to Thomson Reuters I/B/E/S.
Seagate shares were at $54.40 after the bell. They closed at
$58.05 on the Nasdaq on Monday.