Seagate Technology (STX +19.11%) stock is soaring Wednesday following a strong quarterly report. The storage specialist's share price was up 19.3% as of 3:30 p.m. ET.
After yesterday's market close, Seagate published results for the first quarter of its current fiscal year, which ended Oct. 3. The company reported sales and earnings that beat expectations, and it also announced a dividend hike and encouraging forward guidance.
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Seagate surges on strong quarterly results
Seagate Technology recorded non-GAAP (adjusted) earnings per share of $2.61 on sales of $2.63 billion in fiscal Q1. Earnings performance for the period came in ahead of the average analyst estimate by an impressive $0.21 per share, and sales for the period topped Wall Street's forecast by $80 million.
Demand connected to artificial intelligence (AI) helped power sales and earnings beats in the quarter. Revenue for the period was up approximately 21% year over year and adjusted earnings surged roughly 65% higher compared to the prior-year period.
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Key Data Points
Seagate issues strong guidance and raises its dividend
For fiscal Q2, Seagate is targeting sales between $2.6 billion and $2.8 billion -- with the midpoint of that guidance range beating the average analyst estimate's call for sales of $2.67 billion. Meanwhile, adjusted earnings per share are projected to be between $2.55 and $2.95. The company's midpoint target for adjusted earnings per share of $2.75 came in well ahead of Wall Street's target for per-share earnings of $2.67.
Along with its strong quarterly report, Seagate also announced that it was raising its quarterly dividend from $0.72 per share to $0.74 per share, representing an increase of 2.8%. While the company's forward yield of 1.1% may not look like much, the business is posting strong cash-flow growth that could pave the way for more payout hikes.
