Seagate forecasts third-quarter revenue below estimates on slow PC market rebound

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(Reuters) – Seagate Technology on Tuesday forecast third-quarter revenue below analysts’ estimates, expecting sluggish sales for its storage devices used in personal computers as the PC market struggles to bounce back.

Despite the addition of on-device AI features and an anticipated Windows 11 refresh cycle, end-market demand for PCs has remained muted as the market emerges from one of its worst slumps in decades.

Seagate expects revenue of $2.10 billion, plus or minus $150 million, for the third quarter, compared with analysts’ average estimates of $2.19 billion, according to data compiled by LSEG.

Global PC shipments rose about 1% to 245.3 million units in 2024 – marking the second consecutive year shipment volume has dipped below 250 million, according to research firm Gartner.

Seagate expects third-quarter adjusted profit of $1.70 per share, plus or minus 20 cents, compared with estimates of $1.69.

The dour forecast also casts a shadow over expectations of normalization in memory device inventory levels, after a supply glut over the last two years drove cloud providers to cut back on orders in a bid to clear existing inventory.

Analysts have said that in 2025, cloud providers’ growing investment in infrastructure to support generative AI development could help buoy sales for Seagate, which supplies disk drives used to store vast amounts of data.

Seagate reported revenue of $2.33 billion for the second quarter ended Dec. 27, largely in line with estimates of $2.32 billion.

(Reporting by Arsheeya Bajwa in Bengaluru; Editing by Shailesh Kuber)