Seagate Technology PLC (NASDAQ:STX) saw its shares fall by more than 4% in pre-market today after issuing second-quarter guidance that fell short of analyst estimates. Despite posting better-than-expected earnings and revenue for fiscal Q1, the company’s outlook for the upcoming quarter dampened investor sentiment.

For the first quarter, Seagate reported adjusted earnings per share (EPS) of $1.58, surpassing the Street estimate of $1.48. Revenue also exceeded expectations, reaching $2.17 billion compared to the forecasted $2.13 billion.

CEO Dave Mosley highlighted the company’s strong start to the fiscal year, with gross margins hitting their highest level in over a decade. Seagate made significant strides in scaling its 28-terabyte nearline drives and expanding cloud customer adoption of its HAMR-based Mozaic products.

However, looking ahead to Q2, Seagate forecast adjusted earnings of $1.85 per share, with a 20-cent margin of error, which fell just below the Street consensus of $1.87. The company also projected revenue of approximately $2.30 billion, slightly under the expected $2.35 billion.