Seagate Technology Meets on the Top Line, Misses Where it Counts

Seagate Technology (Nasdaq: STX  ) reported earnings on July 30. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended June 29 (Q4), Seagate Technology met expectations on revenues and missed estimates on earnings per share.

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

Margins improved across the board.

Revenue details
Seagate Technology logged revenue of $4.48 billion. The 15 analysts polled by S&P Capital IQ foresaw revenue of $4.55 billion on the same basis. GAAP reported sales were 57% higher than the prior-year quarter's $2.86 billion.

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

EPS details
EPS came in at $2.41. The 19 earnings estimates compiled by S&P Capital IQ averaged $2.53 per share. GAAP EPS of $2.37 for Q4 were much higher than the prior-year quarter's $0.26 per share.

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 33.1%, 1,380 basis points better than the prior-year quarter. Operating margin was 23.6%, 1,680 basis points better than the prior-year quarter. Net margin was 22.6%, 1,840 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $4.51 billion. On the bottom line, the average EPS estimate is $2.25.

Next year's average estimate for revenue is $17.19 billion. The average EPS estimate is $7.85.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 1,151 members out of 1,251 rating the stock outperform, and 100 members rating it underperform. Among 352 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 327 give Seagate Technology a green thumbs-up, and 25 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Seagate Technology is hold, with an average price target of $31.03.

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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 of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no positions in the stocks mentioned above. 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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