Seagate Technology PLC (NASDAQ:STX) Post Q2 Guidance

Seagate Technology PLC’s shares dropped 5% in premarket trading on Wednesday following a Q2 guidance that did not meet analysts' expectations.

Fiscal Q1 Performance

For the fiscal Q1 ending September 27, Seagate reported:
– Adjusted Earnings Per Share (EPS): $1.58 (beating estimates of $1.48)
– Revenue: $2.17 billion (also above the estimated $2.13 billion)

Dave Mosley, CEO of Seagate, remarked, "Seagate is off to an outstanding start to the fiscal year, highlighted by gross margin expanding to the highest level in more than a decade."

Future Outlook

Looking ahead, the company anticipates:
– Adjusted Earnings: $1.85 per share (below the consensus estimate of $1.87)
– Revenue: Approximately $2.30 billion (slightly below the estimated $2.35 billion)

Following the report, Mizuho analysts reiterated an Outperform rating on STX shares and raised their price target from $125 to $130. They believe STX is well-positioned for the upcycle with strong mass capacity demand and the ramping of HAMR.

Baird analysts commented that HAMR is in the early stages of volume shipments and may serve as a catalyst for gross margin growth. They expect free cash flow to improve throughout the year.

Dividend Declaration

Seagate’s Board of Directors has declared a quarterly cash dividend of $0.72 per share, payable on January 6, 2025, to shareholders on record as of December 15, 2024.