Seagate Technology said Tuesday that its fiscal second quarter sales will be slightly ahead of expectations, but gross margins will be at the low end of its projected range.
The storage company said it will report second quarter revenue of "at least $3.6 billion." Wall Street was looking for sales of $3.52 billion. Seagate said it expects to maintain market share and ship 58 million drives in the quarter.
Gross margins for the second quarter will be 27 percent, the low end of Seagate's non-GAAP target of 27 percent to 32 percent. Wall Street was expecting gross margins of 27.4 percent.
Slowing PC sales have raised worries about hard drive makers and their financials. Evercore analyst Rob Cihra said he expected flat shipments of hard drives quarter over quarter at 57 million to 58 million due to bloated PC inventory and weak demand.
Cihra, however, expects Seagate to report stronger March and June quarters because hard drive inventory levels will be low. Seagate and Western Digital dominate the hard drive market and can deliver better economics than the historic boom and bust cycle.