(Reuters) -Seagate Technology Holdings lowered its first-quarter earnings expectations on Wednesday as an economic slowdown hits orders for its data storage products from certain Asian markets and enterprise customers.
Demand for hard disks and server storage products has dried up this year as decades-high inflation pressures the budgets of consumers and companies, ending the industry’s pandemic boom.
“Since our earnings call in mid-July, weaker economic trends in certain Asian regions have amplified customer inventory corrections and supply chain disruptions,” said Chief Executive Officer Dave Mosley.
Seagate’s stock fell 6% in premarket trading, with the move also dragging down rivals Micron Technology and Western Digital Corp by 1.1% and 4.4%, respectively.
The California-based company now expects revenue of $2.1 billion plus or minus $100 million, down from $2.35 billion to $2.65 billion.
Seagate also plans to idle some production capacity, a move that is expected to push down margins despite efforts to lower expenses and capital investments.
Adjusted profit is estimated to be “meaningfully below” the prior guidance of at least $1.20 per share, the company said.
Micron Technology also cut its revenue forecast earlier this month as customer inventories pile up amid waning demand for chips used in personal computers and smartphones.
(Reporting by Akash Sriram and Tiyashi Datta in Bengaluru; Editing by Aditya Soni)