In the second quarter, Canalys reported that desktop and notebook sales in the second quarter fell by
15% Y/Y to 70.2 million. The report, posted on July 12, 2022, should have prepared investors for
disappointment in Seagate (STX) and Corsair (CRSR).
Seagate reported a 12.6% Y/Y drop in revenue, to $2.63 billion. It earned $1.59 a share (non-GAAP) in its
Q4/22 report. For Q1/2023, the hard disk supplier expects revenue of $2.5 billion. Analysts expected a
$2.99 billion figure. Non-GAAP EPS will be $1.40 +/- 20 cents.
The PC market is slowing down. The pandemic pressured corporations to upgrade computer systems.
Consumers upgraded home systems during the lockdown. Combined with the post-pandemic reopening
and now the recession, consumers are cutting back on PC spending.
Corsair, known for its colorful RGP powerful gaming systems, warned that its second-quarter revenue
would not meet the $350 million consensus estimate. At $284 million in revenue, the company will lose
up to $11 million in EBITDA. CEO Andy Paul blamed macro-economic headwinds for hurting customer
spending.
In Europe, customers spent less on hardware. Corsair is stuck with excess inventory.
On 7/22/2022, Corsair filed a $300 million secondary offering. It will not receive any proceeds from the
sale. Shareholders are selling. Investors should avoid Corsair.
