Seagate Technology Lowers Q4 Revenue, Margin Outlook

(RTTNews) - Computer storage device maker Seagate Technology plc (STX) on Monday lowered its outlook for fourth-quarter revenue and gross margin, citing lower than expected intra-quarter demand. The revised revenue outlook is below analysts' estimates.

For the fourth quarter, Seagate now expects to report revenue of about $2.9 billion and adjusted gross margin of about 27.0 percent. Earlier, the company forecast fourth-quarter of revenue of $3.2 billion to $3.3 billion, and adjusted gross margin of about 28.5 percent.

On average, analysts polled by Thomson Reuters expect the company to revenues of $3.19 billion for the fourth quarter. Analysts' estimates typically exclude special items.

Further, the company expects adjusted operating expenses for the fourth quarter of about $530 million, below its previous forecast for adjusted operating expenses of about $555 million.

Seagate expects to report fourth-quarter unit shipments of about 45 million, maintaining a market share of about 40 percent and reflecting about 52 exabytes.

The company will report its financial results for the fourth quarter and year-end 2015 before the market opens on Friday, July 31, 2015.

In a separate statement, Seagate said it is extending its relationship with International Business Machines Corp. (IBM) for high performance computing storage.

Seagate is integrating IBM Spectrum Scale software with its ClusterStor High Performance Computing or HPC storage to deliver a new software defined storage appliance. The company noted that the new product will yield productivity and efficiency gains for rapidly expanding data intensive markets.

The new appliance will help users manage the demands of data-intensive workloads, such as genomic research, computer aided design, digital media, data analytics, financial model analysis and electronic design simulations.

Seagate expect its new software defined storage appliance to be available from its sales partners late in 2015.

STX is trading at $44.69, down $1.26 or 2.74 percent on a volume of 1.20 million shares.