Will Seagate Earnings Top Western Digital and SanDisk?

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

Seagate Technology (NASDAQ: STX  ) will release its quarterly report on Monday, and shareholders have enjoyed the stock's rise to all-time record highs. The Big Data trend has helped give both Seagate and hard-disk drive rival Western Digital (NASDAQ: WDC  ) new life as they provide ways for companies to store the massive amounts of data they need to analyze. Yet Seagate earnings growth also depends on the company's ability to innovate with solid-state drives and other new products, pitting it against SanDisk (UNKNOWN: SNDK.DL  ) and its emphasis on that arena.

For a long time, investors fled from Seagate and Western Digital, figuring that the death of the PC would inevitably lead to hard-disk drive technology becoming an antiquated relic. But even as SanDisk and its solid-state peers have made big inroads into the smartphone and mobile-device field, Seagate has positioned itself well, working to preserve its core legacy business as long as possible while adapting it to changing conditions in the tech industry. Can Seagate keep walking that fine line in the years to come? Let's take an early look at what's been happening with Seagate Technology over the past quarter and what we're likely to see in its report.

Stats on Seagate Technology

Analyst EPS Estimate


Change From Year-Ago EPS


Revenue Estimate

$3.56 billion

Change From Year-Ago Revenue


Earnings Beats in Past 4 Quarters


Source: Yahoo! Finance.

Can Seagate earnings get back on track?
Analysts have had mixed views on Seagate earnings in recent months, cutting their September-quarter estimates by a penny per share but raising their projections for both the current fiscal year and the next. The stock has reflected the longer-term view, rising 19% since late July.

Seagate's share-price success actually took a pause coming into the quarter, as its fiscal fourth-quarter results reflected concerns about the company's ability to keep up with changing trends. Adjusted earnings topped expectations, but guidance for the September quarter left investors wondering whether Seagate would be able to take full advantage of the opportunity in the cloud-computing business for further growth.

But merger-and-acquisition activity in the space last month helped push Seagate stock up substantially. Western Digital bought Virident Systems in a $685 million transaction that should boost Western Digital's share of the enterprise solid-state drive market, as Virident has specialized on systems for enterprise-based data centers that help companies collect and analyze data and build out their presence in the cloud. Speculation immediately arose that Seagate would make a bid for Fusion-io (UNKNOWN: FIO.DL  ) in order to keep up with Western Digital. So far, that bid hasn't materialized, but weak earnings from Fusion-io sent its shares down substantially and could make an acquisition cheaper for Seagate.

Still, Seagate is moving forward with its own technological advances. New technology like shingled magnetic recording has boosted data capacity on standard hard drives, with Seagate expecting to create a 20-terabyte drive by the end of the decade. At the same time, Seagate has designed ultra-thin hard drives for use in tablets, offering greater capacity with similar performance to the flash-based memory products that SanDisk and its competitors have emphasized.

In the Seagate earnings report, watch to see how the company responds to the Western Digital acquisition of Virident. Any strategic moves Seagate makes could help define for investors which direction it sees as its most lucrative money-making opportunity in the years to come.

Another way to profit from Big Data
Seagate isn't the only play on enterprise data analysis. To show you another company that's doing its best to take full advantage of Big Data, The Motley Fool has compiled a new report called "The Only Stock You Need to Profit From the NEW Technology Revolution." The report highlights a company that has gained 300% since first recommended by Fool analysts but still has plenty of room left to run. To get instant access to the name of this company transforming the IT industry, click here -- it's free.

Click here to add Seagate Technology to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2700992, ~/Articles/ArticleHandler.aspx, 9/27/2016 3:00:21 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,220.63 125.80 0.70%
S&P 500 2,158.32 12.22 0.57%
NASD 5,303.59 46.10 0.88%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

12/31/1969 7:00 PM
SNDK.DL $0.00 Down +0.00 +0.00%
SanDisk CAPS Rating: ***
STX $38.39 Up +1.19 +3.20%
Seagate Technology CAPS Rating: ****
WDC $58.86 Up +1.85 +3.25%
Western Digital CAPS Rating: ***
FIO.DL $0.00 Down +0.00 +0.00%
Fusion-io CAPS Rating: ***