The manufacturer of hard drives Seagate Technology published a report on the work of the fourth quarter of 2017 fiscal year. The company also announced the resignation of the general director.
For the three-month reporting period, closed on June 30, 2017, Seagate's revenue was $ 2.41 billion compared to $ 2.65 billion a year earlier. The company's net profit rose from $ 70 million, or 23 cents per share, to $ 114 million, or 38 cents per share.
Adjusted earnings that do not take into account a number of one-time incomes and expenses reached 65 cents per share, while analysts surveyed by FactSet expected this revenue at 98 cents per share. The revenue also did not reach the average forecast of Wall Street ($ 2.56 billion).
On the day of publication of the financial report, Seagate shares fell in price by 17%. The quotation rate was at its lowest level in the last eight months, according to MarketWatch.
The decline in Seagate's revenue is largely due to the low demand for personal computers. According to Gartner, in the second quarter of 2017, a total of 61.1 million desktops and laptops entered the world market, which is 4.3% less than a year ago. The decline in the computer industry has not stopped for five years already, and this is the eleventh consecutive decline in shipments of PCs by the end of the quarter. At the same time, the result for April-June 2017 was the lowest quarterly indicator in the global PC market since 2007.
Most of the revenue from HDD sales - 67% in the fourth financial quarter - Seagate brought OEM-contracts for the supply of products to manufacturers. The shares of retail and distribution channel were 15% and 18% respectively.
Corporate HDD shipments accounted for 37% of the US manufacturer's earnings against 41% a year earlier. Seagate focused on cloud products, as companies cut costs on traditional storage systems.
"In conversation with our customers around the world, we received good news that the growth of storage capacity in data centers is still quite strong. This indicates a recovery. We have already seen this several times on the market. Therefore, we consider these problems temporary, "said Steve Luczo, chairman and CEO of Seagate,.
As announced on Wednesday, July 25, Luso will step down as head of the company in October 2017, transferring power to Operations Director Dave Mosley, who has been with Seagate since 1995. Luso will remain chairman of the board of directors.