Seagate expects higher revenues after demand surge
Last updated: 11:17 12 Jul 2016 EDT, First published: 06:17 12 Jul 2016 EDT
Shares in Seagate Technology PLC (NASDAQ:STX) rose 20% after it told investors to expect higher revenues and margins in the quarter due to a greater demand for its products.
In an effort to streamline its operations, the data storage company also announced cost cutting initiatives, which includes the axing of around 14% of its global workforce, around 6,500 jobs.
The company expects to save US$100mln annually through the retrenchment.
It now expects revenues of around US$2.65bn compared with previous guidance of US$2.3bn.
The group said it was seeing increased demand for its hard disc drives (HDD).
“We believe the long-term trend of exabyte storage demand growth exceeding HDD areal density growth remains intact for the foreseeable future. Seagate will continue to evolve its product offering, technology investment and manufacturing footprint to best serve our customers with the world’s most advanced and cost advantaged HDD products,” said chief executive Steve Luczo.
Shares were up more than 20% to US$29.
