Hard drive manufacturer Seagate Technology issued a shock profit warning after markets closed on Wednesday.
Instead of the small profit analysts were projecting, the company now says it expects to show a "substantial" operational loss and lower than expected turnover for its second fiscal quarter, which ended on 2 January. Seagate blamed continued pricing pressure and weak demand for its disk drives.
The company also stated that restructuring costs would amount to more than $300 million, most of which will be booked against second quarter earnings. In December, the company announced the closure of its Irish factory (see Newswire 17 December).
Like its two main competitors, Quantum and Western Digital, Seagate has been hurt by the rising popularity of sub-$1,000 PCs. Analysts are predicting further woes for the hard drive industry.
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