Death of PC
The Death of the PC Continues to Weigh on Seagate
By Sam Mattera | More Articles
October 31, 2013 | Comments (0)
Shares of hard-drive maker Seagate (NASDAQ: STX ) tumbled after the company reported earnings on Monday. Analysts had expected revenue and profit to decline, but the results came in worse than expected -- profit fell 27% while revenue was down more than 5% from the prior year.
Although Seagate raised its dividend and continues to trade at a below-market multiple, the hard drive itself is beset with technical challenges. Companies like
Microsoft (NASDAQ: MSFT ) are pushing cloud storage, while firms like
SanDisk (NASDAQ: SNDK ) offer better-performing solid-state drives.
Seagate's earnings continue to dry up
Seagate's report on Monday marks its second consecutive earnings disappointment.
Back in July, Seagate shares fell 10% after the company reported a quarter in which revenue fell 24% from the prior year.
Seagate, as a PC supplier, has suffered as demand for traditional PCs has declined.
This year has been one of the worst on record for the PC, as shipments of traditional desktop and laptop computers have posted the worst declines in history.
Consumers, and even some enterprise users, are switching over to mobile devices in place of traditional PCs. In general, mobile devices don't use hard drives, instead relying on solid-state storage.
Solid-state drives are the future
Admittedly, Seagate does offer some solid-state drives, but it's a relative newcomer in the sector. Seagate has offered enterprise-grade SSDs for a few years, but it wasn't until earlier this year that it entered the consumer market.
While Seagate is one of three remaining hard-drive makers, the market for solidstate drives is flush with competitors, including SanDisk (NASDAQ: SNDK ) .
And while Seagate has seen its earnings fall, SanDisk has been outperforming expectations, posting a steady string of earnings beats as shares have risen more than 60% this
By Sam Mattera | More Articles
October 31, 2013 | Comments (0)
Shares of hard-drive maker Seagate (NASDAQ: STX ) tumbled after the company reported earnings on Monday. Analysts had expected revenue and profit to decline, but the results came in worse than expected -- profit fell 27% while revenue was down more than 5% from the prior year.
Although Seagate raised its dividend and continues to trade at a below-market multiple, the hard drive itself is beset with technical challenges. Companies like
Microsoft (NASDAQ: MSFT ) are pushing cloud storage, while firms like
SanDisk (NASDAQ: SNDK ) offer better-performing solid-state drives.
Seagate's earnings continue to dry up
Seagate's report on Monday marks its second consecutive earnings disappointment.
Back in July, Seagate shares fell 10% after the company reported a quarter in which revenue fell 24% from the prior year.
Seagate, as a PC supplier, has suffered as demand for traditional PCs has declined.
This year has been one of the worst on record for the PC, as shipments of traditional desktop and laptop computers have posted the worst declines in history.
Consumers, and even some enterprise users, are switching over to mobile devices in place of traditional PCs. In general, mobile devices don't use hard drives, instead relying on solid-state storage.
Solid-state drives are the future
Admittedly, Seagate does offer some solid-state drives, but it's a relative newcomer in the sector. Seagate has offered enterprise-grade SSDs for a few years, but it wasn't until earlier this year that it entered the consumer market.
While Seagate is one of three remaining hard-drive makers, the market for solidstate drives is flush with competitors, including SanDisk (NASDAQ: SNDK ) .
And while Seagate has seen its earnings fall, SanDisk has been outperforming expectations, posting a steady string of earnings beats as shares have risen more than 60% this