Seagate slashes forecast as economic slowdown hits orders

(Reuters) -Seagate Expertise Holdings lowered its first-quarter earnings expectations on Wednesday as an financial slowdown hits orders for its information storage merchandise from sure Asian markets and enterprise prospects.

Demand for laborious disks and server storage merchandise has dried up this 12 months as decades-high inflation pressures the budgets of customers and corporations, ending the trade’s pandemic increase.

“Since our earnings name in mid-July, weaker financial traits in sure Asian areas have amplified buyer stock corrections and provide chain disruptions,” stated Chief Govt Officer Dave Mosley.

Seagate’s inventory fell 6% in premarket buying and selling, with the transfer additionally dragging down rivals Micron Expertise and Western Digital Corp by 1.1% and 4.4%, respectively.

The California-based firm now expects income of $2.1 billion plus or minus $100 million, down from $2.35 billion to $2.65 billion.

Seagate additionally plans to idle some manufacturing capability, a transfer that’s anticipated to push down margins regardless of efforts to decrease bills and capital investments.

Adjusted revenue is estimated to be “meaningfully under” the prior steering of a minimum of $1.20 per share, the corporate stated.

Micron Expertise additionally minimize its income forecast earlier this month as buyer inventories pile up amid waning demand for chips utilized in private computer systems and smartphones.

(Reporting by Akash Sriram and Tiyashi Datta in Bengaluru; Modifying by Aditya Soni)