Seagate Technology Holdings
shares go on sale on Wednesday, even after the company reports financial results for fiscal fourth quarter ended June 30 who were ahead of Street’s predictions. Apparently, investors wanted a bigger blow than the company delivered.
Seagate stock (ticker: STX) fell 5.6% to $80.70 in recent trading. The
increased by 0.6%.
Expectations for the disk drive maker had risen towards the quarter, driven by a combination of higher IT spending, growth in cloud computing and the adoption of high-capacity disk drives by cryptocurrency miners — and the results likely didn’t match the whisper numbers.
For the quarter, Seagate posted revenue of $3 billion, up 20% from the same period a year ago and ahead of the Street consensus of $2.95 billion. Non-GAAP earnings were $2 per share, which beat the Street consensus at $1.84. According to generally accepted accounting principles, the company earned $2.07 per share, an increase of 64 cents.
Sales hit $3 billion for the first time in six years — and non-GAAP profits were the highest in nine years. Non-GAAP gross margin increased to 29.6% from 27.3% a year ago, while non-GAAP operating margin increased to 18.1% from 14.8% a year ago.
“Demand for data is rapidly increasing in the cloud and on the edge, fueling secular growth for mass storage of data,” Seagate CEO Dave Mosley said in a statement. “Seagate’s industry-leading product portfolio for massive data infrastructure puts the company in an excellent position to capitalize on robust demand trends, generate solid and growing free cash flow and achieve our long-term financial goals.”
For the September quarter, Seagate expects revenue of $3.1 billion, give or take $150 million, with non-GAAP earnings of $2.20 per share, give or take 15 cents; previous Street consensus was $2.94 billion and $1.85 per share. The company said during a conference call with analysts Wednesday morning that it expects revenue growth in the high single digits or better for 2022.
Seagate bought back 2.6 million shares in the June quarter, increasing the total number of shares purchased for the full year to 33.6 million and decreasing the number of shares by approximately 13%.
Write to Eric J. Savitz at email@example.com