Seagate Technology PLC (NASDAQ: STX) shares dropped more than 16 percent on Tuesday morning due to a management issues and financial results that were much worse than predicted.
The company posted adjusted earnings of 65 cents per share, not including items in the fiscal fourth quarter. The earnings horribly missed estimates: expected the company to post over 30 cents more per share, with an estimate of 98 cents per share according to analysts from Thomson Reuters.
Seagate reported revenue of $2.41 billion last quarter, which was $2.562 below what a consensus by Thomson Reuters projected. Around this time last year, Seagate had reported a much higher revenue of $2.65 billion.
Steve Luczo, Seagate CEO, said in a statement that the company saw short term fluctuations in demand for Seagate’s data storage technology amongst all the other higher priced ones in the market.
Luzco also said on Tuesday that he drop the CEO position in October and remain chairman. Chief operating officer Dave Mosley was named new CEO.
"As I said to someone the other day, that running a disc drive company is a little bit like driving in stop and go traffic," Luzco said in the conference call transcribed by FactSet. "Sometimes you're going 15 miles an hour and sometimes you're going 85 miles an hour. But you usually get to your destination on time and no one is hurt, but it's stressful as s--- for the driver and oftentimes for the passengers too."
Despite Tuesday’s plummet, chief financial officer David Morton told analysts that Seagate still remains “well ahead of competition.”
"The good news is from the discussions that we have with our customers worldwide, growth of bits inside of data centers is still on a pretty healthy pace. And so this will come back. We have seen this a number of different times in our industry. And that's why we call it temporal," Luzco said.