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Seagate Technology weakens despite sales upgrade

Tuesday, October 11, 2016 6:57
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(Before It's News)

Data storage giant Seagate Technology (NASDAQ:STX) raised its sales forecast for its first quarter due to strong demand for its higher spec enterprise-grade hard drives.

Sales in the three months to September would be around US$2.8bn said the hard drive maker, around US$100mln better than previous guidance.

Profitability had also picked up said Steve Luczo, chief executive, with gross margins now 29% against 27% though costs will be higher than the previous quarter due to higher bonuses from the improved sales.

 “Our strong results reflect persistent growth and demand for cloud-based storage exabyte capacity and our new high capacity HDD products are gaining traction in the marketplace,” said Luczo.

Seagate should continue to deliver solid financial performance and strong shareholder return for the years to come, he added, as demand for HHD storage capacity is ever-growing.

Cash at the end of the quarter was approximately US$1.5bn.

Shares eased 4% to US$36.34.

Story by ProactiveInvestors

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