Seagate Adjusts Earnings Outlook & Takes A Beating

Seagate Technology announced some of the preliminary financial information for its third quarter that ended on April 1, 2016. Seagate now expects to report a revenue of approximately $2.6 billion instead of their forecast of approximately $2.7 billion. While this isn’t good news, Seagate is also expecting to report non-GAAP gross margin of approximately 23% as opposed to their forecast of non-GAAP gross margin of approximately 25.6%.


Seagate Technology announced some of the preliminary financial information for its third quarter that ended on April 1, 2016. Seagate now expects to report a revenue of approximately $2.6 billion instead of their forecast of approximately $2.7 billion. While this isn’t good news, Seagate is also expecting to report non-GAAP gross margin of approximately 23% as opposed to their forecast of non-GAAP gross margin of approximately 25.6%.


Image courtesy Yahoo Finance

Unsurprisingly Seagate’s stock (NASDAQ: STX) took a pummeling after the announcement, dropping roughly six points. As of this writing Seagate’s stock is hovering around its YTD low. Seagate points to the reduced demand for enterprise HDDs and desktop client products, primarily in China, for its revenue and gross margin adjustments. Seagate also decided to not aggressively participate in the low capacity notebook market. On a brighter note for the company, it is seeing stronger than expected demand for its 8TB Nearline products. 

Seagate Investor Relations

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Adam Armstrong

Adam is the chief news editor for StorageReview.com, managing our internal and freelance content teams.

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