Seagate Technology Q3 Profit Plummets on Smaller Revenue; Beat Estimates (STX)
Hard drive marker Seagate Technology plc (STX) reported late on Wednesday that it saw a significant drop in third quarter profit, as revenues declined due to the weak sales of PCs. However, shares spiked in trading on Thursday because STX earnings and revenue topped Wall Street estimates.
The Dublin, Ireland-based company posted a third quarter net income of $416 million, or $1.13 per share, from $1.15 billion, or $2.48 per share, last year.
On an adjusted basis, earnings for the quarter came in at $464 million, or $1.26 per share, compared to $1.58 billion, or $4.10 per share, last year. Analysts, according to those polled by Thomson Reuters, were expecting Seagate to see adjusted earnings of $1.15 per share.
The company’s quarterly revenue was $3.53 billion, down from $4.45 billion a year ago. Analysts were expecting $3.38 billion in revenue from the company.
Gross margin decreased to 26.9% from 37% last year.
Seagate has struggled due to the decline of the PC market. Because mobile devices like smartphones and tablets don’t require hard drives, Seagate has looked to develop cloud storage systems to stay relevant.
Seagate CEO Steve Luczo said, “The continued advancement of cloud, mobile and open source computing are trends that are shifting data volumes toward personal and corporate cloud environments, creating tremendous opportunities for Seagate’s leading storage technology portfolio.”
Seagate Technology shares were up $2.31, or +5.89%, during Thursday morning trading. The stock is up +29.68% year-to-date.
The Bottom Line
Shares of Seagate Technology (STX) have a dividend yield of 3.87% based on Thursday’s intraday trading price of $39.25 and the company’s annualized dividend payout of $1.52 per share.
Seagate Technology plc (STX) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.
Get FREE Dividend Tips, Updates & MoreWe respect your privacy
- Powerful dividend insights sent every weekday morning
- Gain instant access to actionable investing tips
- Strategically grow your portfolio’s profitability