CEO of struggling disk drive maker says business is 'stable' as shares plunge 16%

Steve Luczo, chief executive officer of Seagate Technology
Daniel Acker | Bloomberg | Getty Images

CEO Steve Luczo was optimistic about Seagate Technology's most recent quarter, but the market wasn't.

Shares of the maker of disk drives on Wednesday closed down more than 16 percent after the company reported fiscal third-quarter revenue of $2.67 billion, below the analyst consensus for $2.71 billion, according to FactSet. The Cupertino, California-based company did beat on earnings, reporting profit per share of $1.10 versus estimates for $1.07 per share, according to FactSet.

"The results of our financial performance this quarter reflect a stable demand environment, good operational execution and momentum in the stabilization of our business model," Luczo, who is also the company's chairman, said in a release after the results, but before the market opened.

Seagate deals primarily in hardware and has faced increased pressure on its business as consumers move increasingly to the cloud.

The shares extended their decline after the company said on a conference call that revenue this quarter would also fall short of expectations.

The stock's drop was a big win for hedge funds betting against it as more than 9 percent of the shares outstanding were sold short going into the report, according to data from FactSet.

Shares of Seagate were down more than 20 percent in the past three years as of Wednesday's close.