Seagate Technology PLC (NASDAQ:STX) Shares Jump on Strong Preliminary Earnings Data

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Seagate Technology PLC (NASDAQ:STX) shares were up 0.33% on Monday and an additional 13.03% to $27.23 in after-hours trading. The company has a market cap of $7.28 billion at 298.48 million shares outstanding. Shares have been trading in a 52-week range of $18.42 to $52.88.

In its preliminary earnings data, Seagate Technology reported revenue of approximately $2.65 billion, gross margin of 25% and non-GAAP gross margin of approximately 25.8% for the fiscal fourth quarter 2016. The company also expects HDD unit shipments to reach approximately 37 million, reflecting approximately 62 exabytes, average capacity per drive of 1.7 terabytes and average selling price per unit of $67 for the fiscal fourth quarter 2016.

These figures feature slight upward revisions for the company’s previous forecasts of fiscal fourth quarter 2016 revenue of approximately $2.3 billion and non-GAAP gross margin of approximately 23%. The difference was spurred by better than expected demand for its HDD product portfolio. Non-GAAP operating expenses for the fiscal fourth quarter are expected to be approximately $440 million

The evolution of mobile and cloud data driven environments continues to define itself as requiring significant amounts of mass storage. HDD devices are where most data bits ultimately reside and our record HDD exabyte shipments in the June quarter, particularly due to enterprise demand, continue to support this thesis,” said Seagate Technology CEO Steve Luczo.

Luzco added that they project strong growth in exabyte storage demand, possibly exceeding HDD areal density growth remains intact for the foreseeable future. Because of that, Seagate plans on developing its product offerings, technology investment and manufacturing footprint to best serve their customers with the most advanced and cost advantaged HDD products.

Seagate Technology is a provider of electronic data storage products, which includesolid state hybrid drives (SSHD), solid state drives (SSD), peripheral component interconnect express (PCIe) cards and Serial AT Attachment (SATA) controllers. The company’s productsare designed for enterprise servers and storage systems for applications, client compute applications and client non-compute applications.

 

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