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(Reuters) – Seagate Technology Holdings cut its first-quarter profit forecast on Wednesday as the economic slowdown hit orders from its knowledge garage from some Asian markets and corporate customers.
Demand for hard drives and server garages has dried up this year as decades-long high inflation weighs on customer and business budgets, ending the industry’s pandemic boom.
“Since our earnings were announced in mid-July, weaker economic trends in some Asian regions have amplified visitor stock corrections and chain disruptions,” said Lead Executive Dave Mosley.
Seagate shares fell 6% in premarket trading, and the move sent rivals Micron Technology and Western Digital Corp down 1. 1% and 4. 4%, respectively.
The California-based company now expects a profit of $2. 1 billion or so $100 million, a reduction from $2. 35 billion to $2. 65 billion.
Seagate also plans to reduce some production capacity, a move that is expected to reduce margins despite efforts to reduce spending and capital investment.
Adjusted earnings are estimated to be “significantly lower” than the previous third class through at least $1. 20 consistent with participation, the company said.
Micron Technology also cut its profit forecast earlier this month as visitor stocks piled up amid falling demand for chips used in computers and smartphones.
(Reporting via Akash Sriram and Tiyashi Datta in Bengaluru; Editing via Aditya Soni)