NEW YORK (TheStreet) -- Shares of Seagate
(STX - Get Report) were down nearly 9% shortly after the opening bell Tuesday after the company reported lower revenue and earnings for the quarter that ended in December.
Sales of $3.53 billion failed to match the $3.67 billion the company logged a year earlier. Earnings were just $428 million, vs. $492 million a year before.
This came just one week after Seagate shares hit an all-time high of $62.76, the price having jumped more than 75% over the previous year.
Both Seagate and its main rival, Western Digital
(WDC - Get Report), had been on the rise through January after one of their main suppliers, Hutchinson Technology
(HTCH), reported preliminary December numbers that soundly beat consensus estimates.
Seagate was our featured technology winner as recently as Jan. 3. Back in December Seagate also had announced it was acquiring Xyratex, which makes equipment to test hard drives, for $374 million.
So what happened? And could what happened to Seagate also happen to WDC?
It is no secret that the hard-disk business has consolidated, and that faster memory chips are becoming a serious competitor in storage. Devices such as tablets and phones no longer include hard disks, only chip memory, but Seagate and Western Digital have kept going by selling high-capacity drives for use in cloud storage subsystems, and with consumer products like those from the French company LaCie, which Seagate bought in 2012.
Seagate LaCie impressed reviewers at this year's Consumer Electronics Show with the Sphere, a round terabyte-sized storage unit designed by the silversmiths Christofle, connected to a PC via a USB port. The company also announced Fuel, a battery-powered drive that can create its own wireless network, and Little Big Disk Thunderbolt for use with Apple
Meanwhile, Western Digital managed to beat expectations for December,
with earnings per share of $2.19 share topping consensus estimates of $2.08, on $3.97 billion in revenue, which also topped estimates.