Seagate Technology is lowering its business outlook for the fiscal first quarter ending Sept. 30 against a worsening macroeconomic backdrop, the company announced Wednesday. STX stock dropped.
The company now expects fiscal first-quarter revenue of $2.1 billion "plus or minus $100 million," which compares with previous guidance in the range of $2.5 billion, plus or minus $150 million.
It also expects adjusted earnings per share "to be meaningfully below our prior guidance of at least $1.20," it said in a press release.
Seagate is a leading manufacturer of disk drives and other storage products. It competes primarily with Western Digital.
Take Our Anonymous Survey And Tell IBD What Characteristics Are Most Important For Online Brokers
STX stock dropped 3.5% to close at 66.96 on the stock market today. Western Digital stock fell 2.5% to 42.26.
STX Stock: Weaker Trends, Supply Chain Issues
"Since our earnings call in mid-July, weaker economic trends in certain Asian regions have amplified customer inventory corrections and supply chain disruptions," Seagate Chief Executive Dave Mosley said in written remarks with the press release.
Mosley went on to say: "We have also seen more cautious buying behavior among global Enterprise/OEM and certain U.S. cloud customers amid ongoing macroeconomic uncertainties."
In reaction, Seagate said it is taking steps to minimize the impacts to the business. This includes reducing production output, lowering expenses and moderating fiscal 2023 capital investments.
STX stock is down 42% this year.
Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.
