Seagate Boosts Revenue Guidance
Shares of Seagate (NASDAQ: STX) rallied in the aftermarket on Tuesday after the company boosted its outlook for sales. Seagate now expects second quarter revenue to come in at $3.6 billion, more than the $3.5 billion the company had previously seen and better than the $3.52 billion consensus analyst estimate.
Seagate shares rallied as much as 4 percent, but quickly gave back about half the gains. Competitor Western Digital (NASDAQ: WDC) saw a similar pop, rallying slightly more than 2 percent.
The hard drive maker is an interesting stock for a number of reasons. Its one of hedge fund manager David Einhorn's largest holdings, and has a decent short interest with about 13 percent of the float sold short.
Seagate has been a solid performer since mid December, rallying up from about $25 per share to near $32. Shares are up from about a year ago, when they hovered near $18 per share.
Over the longer term, Seagate could be facing a number of secular issues. The company has virtually no exposure to the growing solid state market, to say nothing of the fact that the broader PC industry appears to be in decline.
At the same time, however, cloud computing is driving demand for servers, which would tend to support Seagate's products.
Shares of Seagate closed at $31.39 on Tuesday.
© 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.