Seagate Q4 a big miss, CEO Luczo to become executive chairman

Seagate's fourth quarter highlighted price competition amid a storage industry glut for hard drives.

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Seagate's fiscal fourth quarter results were well below expectations and the company said it will have a new CEO effective Oct. 1.

Current CEO Steve Luczo will become executive chairman Oct. 1 and be replaced by Dave Mosley, who is currently chief operating officer.

The leadership transition comes after a trying quarter for Seagate. Analysts have been concerned that there is an inventory glut in high capacity drives and storage vendors are increasingly competing on price. In addition ABR Investment Strategy analyst Brad Gaswirth noted that Seagate is seeing units slip as a move to flash storage cannibalizes traditional drives.

Those concerns played out in Seagate's fourth quarter.

Seagate reported fourth quarter earnings of $114 million, or 38 cents a share, on revenue of $2.4 billion, down from $2.65 billion a year ago. Non-GAAP fourth quarter earnings were 65 cents a share.

Wall Street was looking for earnings of 98 cents a share on revenue of $2.56 billion.

For fiscal 2017, Seagate reported earnings of $772 million, or $2.58 a share, on revenue of $10.8 billion.

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Luczo said the fiscal year results were solid, but "the near-term dynamics of technology shifts present demand variations for the storage industry."

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