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What Seagate Expects from Fiscal 2Q18 and Fiscal 2018

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Dec. 4 2020, Updated 10:52 a.m. ET

Revenue could rise between 3% and 5% sequentially

Seagate (STX) expects transformation in the storage sector to drive long-term revenue for the firm. The shift from client server to mobile cloud and high-capacity storage deployments provides Seagate an opportunity to penetrate this space and gain market share. Seagate continues to remain “cautiously optimistic” about the macroeconomic environment and spending trends.

Seagate CEO Dave Mosley stated, “On the heels of the various IT component supply constraints, we witnessed in late calendar 2016 and early 2017 we are continuing to monitor outgoing inventory closely.” Seagate aims to reduce inventory levels in fiscal 2018.

In fiscal 2Q18, Seagate estimates strong exabyte growth coupled with seasonal demand (in PC and consumer) to drive sequential revenue growth of 3% to 5%. The company expects revenues of $2.71 billion to $2.76 billion in 2Q18.

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Analysts expect revenue of $2.74 billion in 2Q18

Wall Street analysts expect Seagate to post revenue of $2.74 billion in 2Q18. They have a high revenue estimate of $2.81 billion and a low estimate of $2.9 billion. If Seagate meets average estimates of $2.74 billion, it would mean a YoY (year-over-year) fall of 5.4% compared to revenue of $2.9 billion in 2Q17. Analysts expect Seagate’s revenue to fall 5.4% YoY to $2.53 billion in 3Q18, 4.1% YoY to $10.3 billion in fiscal 2018, and 1.6% YoY to $10.2 billion in fiscal 2019.

Analysts expect Seagate’s EPS (earnings per share) to fall over 16% YoY to $1.15 in 2Q18 from $1.38 in 2Q17. The firm’s EPS is expected to fall 2.7% YoY as well to $4.01 in fiscal 2018 from $4.12 in fiscal 2017.

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