Seagate Technology Plc (NASDAQ:STX), producer of a range of disk drive products, lowered its fourth-quarter revenue and margin outlook. STX’s fourth-quarter results were negatively impacted by quality issues at a supplier, and a faster-than-expected recovery in the hard disk drive market.
Seagate benefited in recent months as last year’s flooding in Thailand damaged manufacturing facilities of some of the company’s rivals, and led to disruption in production. But, the industry has recovered quicker-than-anticipated, and as a result, STX has lost its advantage.
For the fourth quarter ended June 29, Seagate expects revenue of approximately $4.5 billion. This compares with STX’s previous revenue guidance of $5 billion. The company expects adjusted gross margin for the quarter to be at 33.6%, compared to previous forecast of 34.5%.
CEO Steve Luczo noted that Seagate failed to achieve its planned market-share growth in the quarter due to faster-than-expected recovery in the industry. Luczo also suggested that the company’s September quarter could be difficult due to macroeconomic concerns.
STX stock has opened sharply lower in trading today. At last check, STX was trading 4.23% lower at $24.02 on volume of 201,042. STX has gained more than 46% this year.
