Seagate shares tumble after revenue guidance chop

Seagate blames the decreased forecasts on lower than expected demand during the quarter. The company's shares dropped nearly 16 percent in early trading.

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Hard-disk drive storage provider Seagate on Wednesday lowered its revenue and margin guidance ahead of the release of its third quarter earnings report later this month. By the time markets opened today the company's stock price was in a nose dive.

The Cupertino, California-based company now expects revenue of roughly $2.6 billion, down from its previously forecast of $2.7 billion. Analysts were expecting revenues of about $2.7 billion for Seagate's Q3.

Seagate's shares have dropped nearly 16 percent in early trading.

Seagate also cut its outlook for margins, from the original estimate of 25.6 percent down to around 23 percent.

Seagate blames the decreased forecasts on lower than expected demand during the quarter. The company says it now expects third quarter unit shipments of approximately 39 million. A year ago Seagate pegged this figure upwards of 45 million.

"We are disappointed that we did not anticipate the weaker demand in the March quarter," Seagate CEO Steve Luczo said in a statement. "There are many complex issues impacting the traditional go to market channels in our market, which are reducing our forecast visibility."