Seagate 2020 Q4 Earnings

Seagate Technology PLC (NASDAQ:STX), founded in 1979, specializes in manufacturing hard disk drives (HDDs). It is one of the few companies engaged in making HDDs. Moreover. it also produces a wide range of data storage products such as SSDs. It holds a significant share of the hard disk market and is regarded as a key player in the industry.

STX stock was trading around $60 at the start of 2020. Its share price fell over 7 percent in February after the company’s Q2 revenue missed estimates. One month later, the stock touched a new 52-week low of $39.02 as investors feared the material impact of the Covid-19 pandemic on Seagate business. The stock recovered some of the lost value in the subsequent months.

However, STX share price once again fell nearly 9 percent on July 29 after another disappointing quarterly performance mainly due to weak demand for its products. Overall, STX stock stayed flat in terms of price change during 2020.

Nevertheless, Seagate on Thursday reported better-than-expected financial results for the second quarter ended January 1, 2021. The data-storage company posted a profit of $280 million, or $1.12 per share, as compared to $1.20 per share in the year-ago quarter. On an adjusted basis, the company earned $1.29 per share, beating the analysts’ average estimate of $1.13 per share.

Revenue for the quarter came in at $2.62 billion, down from $2.70 billion in the comparable period, one year ago. On the other hand, analysts were expecting the company to generate revenue of $2.57 billion. Seagate also issued its financial outlook for the third quarter. It projected earnings of around $1.30 per share and revenue of about $2.65 billion for the current quarter.

Seagate shares fell more than 5 percent in the mid-day trading Friday despite beating analysts’ expectations for the second quarter. The drop apparently came after Susquehanna reiterated its “Sell” rating for the stock, while issuing a price target of $40.