Seagate Technology Holdings reported a surprise profit for the December quarter, resulting in an increase in company shares. The company showed signs of improving demand from cloud data-center customers.
Troy D. Hanson
January 25, 2024
Seagate Technology Holdings announced a surprising profit for the December quarter, leading to an increase in the company's shares. The company revealed signs of an improving demand from cloud data-center customers. While the results and financial forecasts were expected to surpass Wall Street consensus estimates, they were still seen as positive.
For its fiscal second quarter that ended on December 29, Seagate reported revenue of $1.56 billion, representing an 18% decrease from the previous year but a 7% increase sequentially. This figure was consistent with both management's guidance and Street estimates tracked by FactSet. Adjusted earnings for the quarter stood at 12 cents per share, surpassing its forecast of a 10 cent loss per share. Under generally accepted accounting principles, the company reported a loss of 9 cents per share.
Seagate projects a revenue of $1.65 billion for the March quarter, aligning with Street estimates. The adjusted profit forecast stands at 25 cents per share, exceeding the consensus call of 19 cents.
Cloud Market Recovery
Seagate highlights "early signs of market recovery emergence" for cloud nearline drives, which are used for mass storage. The company attributes these positive results to improving cloud demand, strong cost discipline, and effective price execution. Additionally, Seagate reports that it has observed increasing demand from both U.S. and China cloud customers.
In premarket trading on Thursday, Seagate's stock rose 1.5% to $90.50.