Seagate: RBC Chops Estimates; Earnings This Afternoon

RBC Capital’s Amit Daryanani this morning slashed his earnings forecast for Seagate (STX) ahead of the disk-driver maker’s report after the close this afternoon of earnings for its fiscal second quarter ended December. Daryanani maintains his Sector Perform rating on the stock, but cut his price target to $5, from $8. Meanwhile, for the June 2009 fiscal year he now sees revenue of $9.6 billion, down from $9.7 billion, with profits of 10 cents a share, down from 28 cents. For FY 2010, he cuts his revenue forecast to $9 billion, from $10.4 billion, chopping his EPS estimate to 27 cents, from 63 cents. The analyst contends Seagate will face “severe seasonality” in the March quarter, resulting in “sustained and above normal pricing pressure.” He now expects the company to post revenue of $2.1 billion and a loss of 8 cents a share in the quarter; his old estimates were for $2.2 billion and a loss of 2 cents a share. He says that “reduced revenue and ... (link)