Shares of Seagate tumbled more than 16 percent on Tuesday morning amid a management shake-up and financial results that were far worse than expected.
The technology company posted adjusted earnings of 65 cents per share, excluding items, in the fiscal fourth quarter. The earnings badly missed estimates: Analysts polled by Thomson Reuters expected the company to post more than 30 cents more per share, with an estimate of 98 cents per share.
Seagate reported revenue of about $2.41 billion in the latest quarter, below the $2.562 expected by a Thomson Reuters consensus estimate. This time last year, Seagate had revenue of $2.65 billion.
Long-time Seagate CEO Steve Luczo said in a statement that the company saw short-term fluctuations in demand for Seagate's data storage technology amid higher prices in the memory market.
Seagate will slash 600 jobs to cut costs.
Luzco also said on Tuesday that he would transition out of the CEO role in October and remain chairman. Chief Operating Officer Dave Mosley was named new CEO.
"As I said to someone the other day, that running a disc drive company is a little bit like driving in stop and go traffic," Luzco said in the conference call transcribed by FactSet. "Sometimes you're going 15 miles an hour and sometimes you're going 85 miles an hour. But you usually get to your destination on time and no one is hurt, but it's stressful as s--- for the driver and oftentimes for the passengers too."
Despite Tuesday's stock plunge, Chief Financial Officer David Morton told analysts on a conference call that Seagate remains "well ahead of the competition."
"The good news is from the discussions that we have with our customers worldwide, growth of bits inside of data centers is still on a pretty healthy pace. And so this will come back. We have seen this a number of different times in our industry. And that's why we call it temporal," Luzco said.
— Reuters contributed to this report.