Seagate Technology Cuts Guidance on Weak Demand
April 13 2016 - 6:50PM
Dow Jones News
Seagate Technology PLC cut its outlook for its latest quarter to
reflect lower-than-expected demand and focused inventory reductions
that reduced utilization levels at some factories.
Shares fell 3.3% to $32.80 in recent after-hours trading.
Through Wednesday's close, the stock has fallen 39% in the past 12
months.
For the quarter ended April 1, the Cupertino, Calif., company
now expects revenue of roughly $2.6 billion and adjusted margins of
about 23%, compared with its preview guidance for revenue of about
$2.7 billion and adjusted margins of 25.6%.
The company said the reduced outlook included weaker demand for
enterprise disk drives and lower demand for desktop-client
products, primarily in China.
"There are many complex issues impacting the traditional go to
market channels in our market, which are reducing our forecast
visibility," Chairman and Chief Executive Steve Luczo said in
prepared remarks Wednesday.
The company is "in the process of prioritizing our strategic
positioning, manufacturing footprint and operating expense
investments" and changes will be implemented over the next several
quarters, Mr. Luczo stated.
Seagate has long been one of the biggest makers of disk drives
and, together with rival Western Digital Corp., far outsells others
in the field.
The company plans to release its quarterly financial results
April 29.
Write to Tess Stynes at tess.stynes@wsj.com
(END) Dow Jones Newswires
April 13, 2016 18:35 ET (22:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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