Seagate Technology Beats Up on Analysts Yet Again

Seth Jayson, The Motley Fool
Updated

Seagate Technology (NAS: STX) reported earnings yesterday. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 30 (Q3), Seagate Technology beat slightly on revenues and crushed expectations on earnings per share.

Compared to the prior-year quarter, revenue expanded significantly and GAAP earnings per share increased significantly.


Margins improved across the board.

Revenue details
Seagate Technology logged revenue of $4.45 billion. The 17 analysts polled by S&P Capital IQ expected to see revenue of $4.36 billion on the same basis. GAAP reported sales were 65% higher than the prior-year quarter's $2.70 billion.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Non-GAAP EPS came in at $2.64. The 18 earnings estimates compiled by S&P Capital IQ averaged $2.09 per share on the same basis. GAAP EPS of $2.48 for Q3 were much higher than the prior-year quarter's $0.21 per share.

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Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 36.9%, 1,780 basis points better than the prior-year quarter. Operating margin was 27.2%, 2,040 basis points better than the prior-year quarter. Net margin was 25.8%, 2,230 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $4.95 billion. On the bottom line, the average EPS estimate is $2.79.

Next year's average estimate for revenue is $15.29 billion. The average EPS estimate is $7.22.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 1,080 members out of 1,177 rating the stock outperform, and 97 members rating it underperform. Among 345 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 330 give Seagate Technology a green thumbs-up, and 15 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Seagate Technology is outperform, with an average price target of $31.00.

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At the time thisarticle was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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