Seagate Technology Shares Plunge On Q4 Earnings Miss, Weak 1Q Outlook

  • Seagate Technology Holdings PLC STX reported a fourth-quarter revenue decline of 12.8% year-over-year to $2.63 billion, missing the consensus of $2.78 billion.
  • Adjusted EPS of $1.59 missed the consensus of $1.92.
  • Adjusted gross margin contracted by 30 bps to 29.3%, and adjusted operating margin declined by 200 bps to 16.1%.
  • ForFY22, STX generated $1.7 billion in cash flow from operations and $1.3 billion in free cash flow.
  • During the quarter, the company paid cash dividends of $152 million and repurchased 6 million ordinary shares for $486 million.
  • “Our June quarter results reflect stable mass capacity storage demand, offset by the impacts of Covid restrictive measures in Asia and weakening global economic conditions on our other end markets,” stated Dave Mosley, Seagate’s CEO.
  • “The confluence of macro-related challenges is continuing into the September quarter. In this environment, we are reducing our production plans to maintain supply discipline as our customers manage through macro uncertainty and on-going non-HDD component shortages, and we are diligently managing expenses to protect profitability,” Mosley added.
  • Dividend: STX declared a quarterly cash dividend of $0.70 per share, payable on October 5, 2022, to shareholders of record as of the close of business on September 21, 2022.
  • 1QFY23 Guidance: Seagate sees revenue of $2.5 billion, plus or minus $150 million vs. consensus of $3.03 billion; and Non-GAAP EPS of $1.40, plus or minus $0.20, vs. consensus of $2.27.
  • Sympathy Play: Western Digital Corp WDC is down 6.40% at $47. 20, Advanced Micro Devices, Inc. AMD is down 1.14% at $90.05, and NVIDIA Corporation NVDA is down 1.75% at $177.35 during the aftermarket session on Thursday.
  • Price Action: STX shares are trading lower by 10.32% at $74.98 during the post-market session on Thursday.
  • Photo via Wikimedia Commons
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