Seagate's profit fell 94% in the first quarter of fiscal 2023, cutting 3000 jobs worldwide

Thanks to CTOnews.com netizen OC_Formula for the clue delivery! CTOnews.com news on October 27, today Seagate announced its first fiscal quarter of fiscal 2023 (hereinafter referred to as the first fiscal quarter) results. Seagate's revenue in the first quarter of 2023 was $2.035 billion (GAAP), compared with $3.115 billion in the first quarter of 2022 (GAAP). Operating margins fell sharply from 18.8 per cent to 5.3 per cent.

Seagate's profit for the fiscal first quarter ended September 30 was $29 million, down from $526 million a year earlier and down 94 per cent from a year earlier. The company said the decline in profits was caused by global macro factors, and that customers were trying to reduce inventory of mechanical hard drives in the quarter instead of buying new ones.

Seagate also announced a restructuring plan to cut about 3000 jobs worldwide, or 8 per cent of its global workforce. The company expects the restructuring plan to be largely completed by the end of the current quarter, generating between $60 million and $70 million in pre-tax expenses for severance payments and one-time termination benefits. Seagate expects to save about $110 million a year starting in the current fiscal year, based on current data.

Seagate said it shipped 118EB hard drives in the quarter, down 26% from the first quarter of last year. The average capacity of each hard drive is 7.5TB, down from 7.8TB in the previous quarter, but still much higher than 5.5TB in the same period last year.

Revenue from hard drives in the quarter was $1.8 billion, down 38% from a year earlier, but revenue from solid-state drives and other systems (Lyve Cloud, etc.) rose 5% to $263 million.

CTOnews.com learned that its guidance for the current quarter was lower than expected. The company expects second-quarter adjusted earnings per share of 15 cents, or 20 cents, and revenue of $1.85 billion, or $150 million. Analysts surveyed by FactSet had expected second-quarter adjusted earnings per share of 80 cents on revenue of $2.12 billion.