Seagate Technology (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 (WDC 1.83%) 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 (NASDAQ: SNDK) 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

$1.30

Change From Year-Ago EPS

(10.3%)

Revenue Estimate

$3.56 billion

Change From Year-Ago Revenue

(4.7%)

Earnings Beats in Past 4 Quarters

3

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 (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.

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