Market Overview

Seagate Technology's Earnings: A Preview

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On Thursday, October 22, Seagate Technology (NASDAQ: STX) will report its last quarter's earnings. Here is Benzinga's preview of the company's release.

What Are Earnings, Net Income, And Earnings Per Share?

Earnings and EPS are useful metrics of profitability. Total earnings, also known as net income, is equal to total revenue minus total expenses. Dividing net income by the total number of shares outstanding yields EPS.

Earnings And Revenue

Sell-side analysts expect Seagate Technology's EPS to be near $0.88 on sales of $2.34 billion. Seagate Technology reported a per-share profit of $1.03 when it published results during the same quarter last year. Sales in that period totaled $2.58 billion.

What Are Analyst Estimates And Earnings Surprises, And Why Do They Matter?

Analysts who cover this company will publish forward-looking estimates of its revenue and EPS each quarter. Averaging together every EPS and revenue prediction that each analyst makes about a company in a quarter yields the "consensus estimates." A company posting earnings or revenue above or below the consensus estimate is known as an "earnings surprise" and may move the stock by a considerable margin.

The analyst consensus estimate would represent a 14.56% decrease in the company's earnings. Sales would be down 9.23% on a year-over-year basis. Here is how the company's reported EPS has compared to analyst estimates in the past:

Quarter Q4 2020 Q3 2020 Q2 2020 Q1 2019
EPS Estimate 1.29 1.31 1.32 0.99
EPS Actual 1.20 1.38 1.35 1.03
Revenue Estimate 2.61 B 2.61 B 2.72 B 2.56 B
Revenue Actual 2.52 B 2.72 B 2.70 B 2.58 B

Stock Performance

Shares of Seagate Technology were trading at $51.89 as of October 20. Over the last 52-week period, shares are down 7.63%. Given that these returns are generally negative, long-term shareholders are likely unhappy going into this earnings release.

 

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