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Seagate Rides a Wave of Challenges: Earnings and Revenue

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Nov. 20 2020, Updated 1:04 p.m. ET

Seagate Technology’s fiscal 3Q17 earnings

US-based (SPY) Seagate Technology (STX) will be announcing its fiscal 3Q17 results in April 2017. Analysts estimate that the company will post revenues of $2.71 billion for the quarter ending on March 31, 2016. They expect a low estimate of $2.68 billion and a high estimate of $2.74 billion.

Seagate’s EPS (earnings per share) are estimated to come in at $1.07, with a high estimate of $1.24 and a low estimate of $1.01. If Seagate meets analysts’ revenue estimates of $2.71 billion, it will mean a YoY (year-over-year) rise of 4.5%.

Notably, Seagate beat EPS estimates in fiscal 2Q17, fiscal 1Q17, and fiscal 4Q16 by 27.8%, 10%, and 15%, respectively. However, the company posted EPS of $0.22 in fiscal 3Q16—40.5% lower than analysts’ estimates.

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Revenue of $2.8 billion in fiscal 1Q17

Seagate reported revenue of $2.8 billion in fiscal 1Q17 with a gross margin of 30.8%. The shift to cloud computing is offsetting the weakness in the PC storage market. In addition to cost cuts, the rising demand for high-capacity cloud storage products also played a role in boosting Seagate’s fiscal 2Q17 earnings.

Seagate is battling a wave of challenges, including intense competition from rival Western Digital (WDC), which recently acquired SanDisk to strengthen its position in the memory market. Meanwhile, cloud computing providers such as Amazon.com (AMZN) and Oracle (ORCL) have increased their capacities, which has resulted in an even higher demand for high-capacity cloud storage drives.

In the next and final part of this series, we’ll examine Seagate’s stock trends and check in with the analysts.

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