The 10-second takeaway
For the quarter ended Dec. 30 (Q2), Seagate Technology beat slightly on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue improved significantly, and GAAP earnings per share increased significantly.
Margins improved across the board.
Seagate Technology reported revenue of $3.20 billion. The 17 analysts polled by S&P Capital IQ expected revenue of $3.16 billion. Sales were 18% higher than the prior-year quarter's $2.72 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.
Non-GAAP EPS came in at $1.32. The 18 earnings estimates compiled by S&P Capital IQ forecast $1.08 per share on the same basis. GAAP EPS of $1.28 for Q2 were 313% higher than the prior-year quarter's $0.31 per share.
Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.
For the quarter, gross margin was 31.6%, 1,210 basis points better than the prior-year quarter. Operating margin was 19.0%, 1,120 basis points better than the prior-year quarter. Net margin was 17.6%, 1,210 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $4.33 billion. On the bottom line, the average EPS estimate is $1.85.
Next year's average estimate for revenue is $14.87 billion. The average EPS estimate is $4.90.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 1,069 members out of 1,157 rating the stock outperform, and 89 members rating it underperform. Among 368 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 352 give Seagate Technology a green thumbs-up, and 16 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 $21.53.
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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. 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.