(Reuters) – Seagate Technology forecast first-quarter revenue below market estimates on Wednesday on weakness in major market China and lower tech spending by businesses worried about an uncertain economy.
The company, one of the biggest makers of computer hard drives, said it expected current-quarter revenue to be $1.55 billion, plus or minus $150 million.
The midpoint of that was below the analysts’ estimate of $1.74 billion, according to Refinitiv data.
Seagate also missed expectations for fourth-quarter revenue.
The “performance reflected the uneven pace of economic recovery in China, cloud inventory digestion, and cautious enterprise spending amid the uncertain macroeconomic environment,” CEO Dave Mosley said.
Like others in the memory industry, Seagate has seen demand dry up for its data storage products from cloud customers as they work to clear a build-up of inventory after the pandemic.
A slow economic recovery in China from strict COVID-19 curbs has also weighed on demand in a market that analysts said accounts for nearly a third of Seagate’s revenue.
In the quarter to June 30, Seagate’s revenue sank by nearly 40% to $1.60 billion, missing estimates of $1.68 billion.
The company’s gross margin shrank to 19% from 28.9% a year ago as an oversupply of data storage equipment weighed on prices.
Net loss came in at $92 million, or 44 cents per share, compared with a profit of $276 million, or $1.27 per share, a year ago.
The company said it expected a first-quarter adjusted loss of 16 cents per share, plus or minus 20 cents, compared with analysts’ average estimate for a profit of 7 cents.
(Reporting by Aditya Soni in Bengaluru; Editing by Arun Koyyur)
