Seagate Technology Earnings: Double-Digit Revenue Growth, Yet Profit Misses Analyst Mark

Seagate Technology. (NASDAQ:STX) reported higher profit for the first quarter as revenue showed growth. Seagate Technology is a provider of hard disk drives. It designs, manufactures, markets and sells hard disk drives. The company produces a range of disk drive products addressing enterprise applications.

Earnings season is back and more important than ever. Get our newest CHEAT SHEET stock picks now

Seagate Technology. Earnings Cheat Sheet

Results: Net income for Seagate Technology. rose to $582 million ($1.42 per share) vs. $140 million (32 cents per share) in the same quarter a year earlier. This is a more than fourfold rise from the year-earlier quarter.

Revenue: Rose 32.8% to $3.73 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Seagate Technology. reported adjusted net income of $1.45 per share. By that measure, the company fell short of mean estimate of $1.69 per share. It beat the average revenue estimate of $2.69 billion.

Quoting Management: “Seagate continues to adapt to dynamic industry conditions, managing inventory and demand with our customers while maintaining investments in our technology portfolio that will position us for continued success in the marketplace over the long-term,” said Steve Luczo, Seagate chairman and chief executive officer. “Returning value to shareholders remains a top priority with over 70% of our operating cash flow going towards share redemptions and dividends this quarter.”

Key Stats:

The company has now seen net income rise in three straight quarters. In the fourth quarter of the last fiscal year, net income rose 751.3% and in the third quarter of the last fiscal year, the figure rose 1132.3%.

Revenue has risen the past four quarters. Revenue increased 56.8% to $4.48 billion in the fourth quarter of the last fiscal year. The figure rose 65.1% in the third quarter of the last fiscal year from the year earlier and climbed 17.5% in the second quarter of the last fiscal year from the year-ago quarter.

The company has now fallen short of estimates in the last two quarters. In the fourth quarter of the last fiscal year, it missed expectations by 10 cents with net income of $2.41 versus a mean estimate of net income of $2.51 per share.

Looking Forward: Expectations for the company’s next-quarter results are lower than they have been. Over the past sixty days, the average estimate for second quarter has fallen from $2.07 per share to $1.79. For the fiscal year, the average estimate has moved down from $7.53 a share to $6.68 over the last sixty days.

Stocks with improving earnings metrics are worthy of your extra attention. In fact, “E = Earnings Are Increasing Quarter-Over-Quarter” is a core component of our CHEAT SHEET investing framework for this very reason. Don’t waste another minute — click here and get our CHEAT SHEET stock picks now.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

Don’t Miss These Additional Hot Stories:

Are Allstate Shares a Sell in the Face of Hurricane Sandy?

Are New Tablets On Your Holiday Shopping List?

Will Consumers Have a Spooktacular Halloween?

More from The Cheat Sheet