Seagate Cuts Sales Forecast on Smaller Hard-Drive Market
Seagate Technology Plc (STX) said fiscal first-quarter sales will fall short of an earlier forecast, citing a shrinking market for computer hard drives, its main business.
Revenue for the current quarter, which ends Sept. 28, will be 5 percent to 7 percent lower than its previous forecast of $4 billion, the company said in a filing yesterday. That indicates sales of $3.72 billion to $3.8 billion. Analysts were projecting, on average, sales of $3.93 billion, according to data compiled by Bloomberg.
Seagate’s revision underscores ebbing demand for personal computers and related components amid economic weakness and a shift toward mobile devices, such as tablets, that mainly don’t require hard drives. Western Digital Corp. (WDC) cut its forecasts Sept. 13, a week after Intel Corp. (INTC), the largest maker of computer chips, tempered expectations for sales.
Seagate, based in Dublin, predicted that the market for hard drives in the quarter will be about 140 million units. It has a 40 to 43 percent share, according to the filing. Seagate’s market prediction matches that of Western Digital, which this month cut its projection from 157 million units.
Seagate’s gross margin, the percentage of sales remaining after deducting the costs of production, will be about 30 percent, compared with higher than 30 percent predicted in July.
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