Seagate leads tech rout

Leading a Wall Street trouncing of tech stocks, shares of Seagate Technology Inc. lost ground in morning trading as investors digested the company's dismal earnings report.

By midday, the company's stock was down more than $4.

Seagate announced a $240.2 million loss in its first quarter ended October 3. A year ago, the giant disk drive maker earned $129.4 million. Revenues fell to $1.89 billion from $2.06 billion.

Seagate's stock wasn't the only computer issue getting whacked. The high-tech laden NASDAQ was off more than 20 points.

The company blamed the stunning shortfall on slow sales of its higher margin products as well as on a large loss due to foreign currency dealings.

During the quarter, Seagate took several one-time charges relating to research and development expenses as well as its acquisition of Quinta Corp. Seagate was also forced to cover foreign currency hedging. The company, which operates plants in Thailand and Malaysia, announced that it had temporarily stopped drawing up purchasing contracts on some Southeast Asian currencies.

Excluding all the charges, Seagate's quarter was still a bust. It posted earnings of 8 cents per share but analysts surveyed by First Call had expected the company to come in with 37 cents per share.

Bear Stearns cut its rating on Seagate, based in Scotts Valley, Calif., to neutral.

Tech stocks plunged in morning trading, as investors worried about a possible trade war with Japan, and reacted to some disappointing earnings results. The tech-laden NASDAQ fell; among stocks that were down: Sun Microsystems Inc., IBM, Compaq Computer Corp. and Dell Computer Corp.