The largest producer of computer hard drives, Seagate Technology Holdings Plc, issued a dismal prediction for the current quarter blaming “weakening global economic conditions,” which caused the stock to fall more than 10%.
According to a statement released by Seagate on Thursday, revenue in the current quarter might be as low as $2.35 billion. In contrast, the typical analyst forecast is $3 billion. Without certain items, profit will be close to $1.40 per share, falling far short of the $2.27 average expectation.
The business also said that it is decreasing its production plans in order to prevent a glut, following other producers of computer components like Micron Technology Inc. in doing so.
Seagate Chief Executive Officer Dave Mosley noted in the statement that “the convergence of macro-related problems is continuing into the September quarter.” As our clients navigate macro uncertainty in this environment, we are decreasing our production plans to preserve supply discipline.
One of the first manufacturers of computer gear to report results during earnings season is Seagate, but investors have already been preparing for a sombre outlook. Consumer spending on laptops and PCs has sharply declined, and this year will likely see a decline in the number of such devices sold.
Shares of Seagate, which were down 26% as of the New York close, dropped about 11% during extended trading.
The largest producer of computer hard drives, Seagate Technology Holdings Plc, issued a dismal prediction for the current quarter blaming “weakening global economic conditions,” which caused the stock to fall more than 10%.
According to a statement released by Seagate on Thursday, revenue in the current quarter might be as low as $2.35 billion. In contrast, the typical analyst prediction is $3 billion. Without certain items, profit will be close to $1.40 per share, falling far short of the $2.27 average expectation.
The business also said that it is dialling back its manufacturing goals in order to prevent a surplus, following other component manufacturers including Micron Technology Inc. in this move. One of the first manufacturers of computer gear to report results during earnings season is Seagate, but investors have already been preparing for a sombre outlook.
During a conference call with investors, Seagate Chief Executive Officer Dave Mosley stated that consumers worldwide have made the decision to spend money on other things at the moment. Mosley anticipated that in roughly two quarters, demand will start to increase once more.
The company has focused on obtaining business from so-called cloud service providers, or businesses that provide storage via the internet, under Mosley’s direction. According to Seagate officials, these customers prefer high-capacity drives, which have higher profit margins.
Benefits from the endeavour are still being realised. According to Mosley, the need for online storage is continually increasing, and operators of massive data centres continue to spend heavily on capital projects. He stated that he does not anticipate a decline in purchasing in that market.
However, spending on consumer goods, like thumb drives, has drastically decreased. According to Mosley, Seagate has virtually disappeared from the market for laptops and personal computers as a whole.
Shares of Seagate, which were down 26% as of the New York close, dropped about 11% during extended trading.
This is all about Seagate’s Weak Forecast Blamed on ‘Economic Conditions’, for more informative content visit techballad.com