Seagate’s price movement
Seagate Technologies (STX) has a market cap of ~$6.1 billion. Its stock rose by 7.9% to close at $22.53 per share on June 28, 2016. The stock’s weekly, monthly, and trailing 12-month (or TTM) price movements were -5.6%, 4%, and -54%, respectively, on the same day.
Seagate is trading 3.5% below its 20-day moving average, 0.53% above its 50-day moving average, and 18.5% below its 100-day moving average.
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Seagate continues to grapple with slowing sales
In April 2016, Seagate Technology (STX) reported its fiscal 3Q16 results. Earlier that month, Seagate announced its preliminary earnings results and lowered its revenue and margin estimates for fiscal 3Q16.
The company cited weaker-than-expected demand and inventory declines in enterprise disk drives as the primary reasons for this guidance. Seagate expected its revenue to be $2.6 billion, compared to its earlier guidance of $2.7 billion.
Seagate Technology reportedly shipped ~39.2 million HDD (hard disk drive) units in fiscal 3Q16, which ended on March 31, 2016. This represents a significant YoY (year-over-year) fall compared to the company’s 50.1 million units shipped in fiscal 3Q15.
This decline is a concern for Seagate, as it has a market share of ~40% in the United States. HDDs are used in personal computers. According to market research company Gartner, PC shipments in the last quarter are expected to have fallen by 9.6% YoY to 64.8 million units, driven by the increasing dominance of mobile devices.