Shares of Seagate, OCZ Tumble After Seagate Earnings Report

On Monday afternoon, Seagate

reported earnings that disappointed investors. The company reported an adjusted fourth-quarter EPS of $2.41, less than the $2.51 Wall Street was anticipating. Revenue came in at $4.48 billion, short of the consensus estimate of $4.56 billion. Shares of the hard drive maker dived in after-hours trading. Interestingly, a different company was also badly affected by the earnings report. OCZ Tech

shares plummeted following Seagate's report, dropping over 10%. Many traders had been speculating that the company was set to be acquired by Seagate, and that the acquisition would be announced in Seagate's earnings report. In theory, the acquisition might make some sense. OCZ is a company that produces flash memory drives, a technology that has risen to the forefront of computer manufacturing. Although most standard laptops still come with older style, spinning hard drives, new, increasingly popular ultrabook models from companies like Hewlett-Packard

and Dell

sport solid state drives. Apple's

Retina-display Macbook Pro also has a solid state drive. Seagate is an industry leader in the standard-style hard drive market, but lags in solid state -- a sector where OCZ is a major player. Although Samsung has its own solid state division, acquiring OCZ would allow Samsung to instantly gain a foothold in an emerging market nearly overnight. In the earnings call, Seagate defended its share price to some extent, promising to increase its dividend in a meaningful manner going forward. The company also said it would reduce the number of outstanding shares to 250 million by the end of 2014. The hard drive sector has been an interesting place for investors over the last year. Major flooding in Thailand last fall (a country which produced a significant percentage of the world's hard drives) lead to the loss of a tremendous amount of shareholder value, but most of the names in the sector have since rebounded. Seagate's rival Western Digital

saw its shares hit a low near $25 last November, but traded around $40 per share on Tuesday. For its part, Seagate was trading around $9.50 in October of 2011, but shares traded above $30 on Tuesday even with the disappointing earnings report.