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Seagate (STX) to Report Q1 Earnings: What's in the Cards?
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Seagate Technology Holdings plc (STX - Free Report) is scheduled to report first-quarter fiscal 2023 earnings on Oct 26.
On Sep 1, Seagate slashed its outlook for the first quarter of fiscal 2023 amid a deteriorating global macroeconomic environment. The company now expects revenues to be $2.1 billion (+/- $100 million) compared with the previous guidance of revenues of $2.5 billion (+/- $150 million).
Owing to lower revenues, higher under-utilization charges and a less favorable product mix are expected to result in a quarter-over-quarter decline in margins. As a result, non-GAAP earnings per share are now expected to be “meaningfully below” the previous guidance of at least $1.20 per share, added the company.
Seagate Technology Holdings PLC Price and EPS Surprise
The Zacks Consensus Estimate for revenues is pegged at $2.08 billion, which implies a decline of 33.4% from the year-ago quarter’s reported figure. The consensus estimate for earnings stands at 68 cents, which suggests a decline of 71% from the year-ago quarter’s reported figure.
The company missed the Zacks Consensus Estimate in two of the last four quarters while surpassing the same in the remaining quarters. It has a trailing four-quarter negative earnings surprise of 2.7%, on average. In the past year, shares of the company have lost 37.5% of their value compared with the industry’s decline of 66%.
Image Source: Zacks Investment Research
Factors Setting the Tone for Q1
Seagate’s performance is likely to have been affected by global macroeconomic weakness and surging inflation. The lingering supply chain issues and component shortages are added headwinds.
In September, the company noted that since its last earnings call in July 2022, several Asian countries have been facing weaker-than-expected economic trends, leading to increased customer inventory corrections and exacerbated supply chain disruptions. Cautious spending patterns by customers, including global enterprises, OEMs and certain domestic cloud clients, are likely to affect demand for mass capacity solutions in the near term, prompting a downward revision for fiscal first-quarter revenue guidance.
To safeguard itself from the ongoing global economic disturbances, Seagate noted that it was focused on lowering production output, cutting costs and streamlining the current year’s capital investment plan.
Moreover, declining trends witnessed in PC shipments in the third quarter of the calendar year 2022 are likely to have negatively impacted HDD sales in the company’s performance in the quarter under review.
However, Seagate is likely to have witnessed continued strong demand for its mass storage capacity solutions, especially nearline products, driven by strong cloud data center demand and recovery in the enterprise market in the to-be-reported quarter.
The company’s mass capacity portfolio is also expected to have witnessed incremental gains from multiple varieties of its 20-terabyte drives in addition to 18-terabyte drives. Seagate’s Lyve Cloud business is likely to have seen healthy traction among customers. Strength in enterprise and video and image applications (VIA) markets also augurs well.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Seagate this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
Seagate has an Earnings ESP of -2.45% and a Zacks Rank #5 (Strong Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are some stocks you may consider as our model shows that these have the right combination of elements to beat on earnings this season.
The Zacks Consensus Estimate for Chipotle’s to-be-reported quarter’s earnings and revenues is pegged at $9.11 per share and $2.23 billion, respectively. Shares of CMG have lost 12.7% in the past year.
NETGEAR (NTGR - Free Report) has an Earnings ESP of +8.00% and presently carries a Zacks Rank #3. NETGEAR is slated to release quarterly numbers on Oct 26.
The Zacks Consensus Estimate for NTGR’s to-be-reported quarter’s earnings and revenues is pegged at 8 cents per share and $242.8 billion, respectively. Shares of NTGR have lost 34.2% in the past year.
Equinor (EQNR - Free Report) has an Earnings ESP of +25.07% and currently has a Zacks Rank #1. Equinor is scheduled to report earnings on Oct 28.
The Zacks Consensus Estimate for Equinor’s to-be-reported quarter’s earnings and revenues is pegged at $1.78 per share and $57.7 billion, respectively. Equinor surpassed earnings estimates in the preceding four quarters, delivering an average surprise of 7.3%. Shares of EQNR gained 22.5% in the past year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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Seagate (STX) to Report Q1 Earnings: What's in the Cards?
Seagate Technology Holdings plc (STX - Free Report) is scheduled to report first-quarter fiscal 2023 earnings on Oct 26.
On Sep 1, Seagate slashed its outlook for the first quarter of fiscal 2023 amid a deteriorating global macroeconomic environment. The company now expects revenues to be $2.1 billion (+/- $100 million) compared with the previous guidance of revenues of $2.5 billion (+/- $150 million).
Owing to lower revenues, higher under-utilization charges and a less favorable product mix are expected to result in a quarter-over-quarter decline in margins. As a result, non-GAAP earnings per share are now expected to be “meaningfully below” the previous guidance of at least $1.20 per share, added the company.
Seagate Technology Holdings PLC Price and EPS Surprise
Seagate Technology Holdings PLC price-eps-surprise | Seagate Technology Holdings PLC Quote
The Zacks Consensus Estimate for revenues is pegged at $2.08 billion, which implies a decline of 33.4% from the year-ago quarter’s reported figure. The consensus estimate for earnings stands at 68 cents, which suggests a decline of 71% from the year-ago quarter’s reported figure.
The company missed the Zacks Consensus Estimate in two of the last four quarters while surpassing the same in the remaining quarters. It has a trailing four-quarter negative earnings surprise of 2.7%, on average. In the past year, shares of the company have lost 37.5% of their value compared with the industry’s decline of 66%.
Image Source: Zacks Investment Research
Factors Setting the Tone for Q1
Seagate’s performance is likely to have been affected by global macroeconomic weakness and surging inflation. The lingering supply chain issues and component shortages are added headwinds.
In September, the company noted that since its last earnings call in July 2022, several Asian countries have been facing weaker-than-expected economic trends, leading to increased customer inventory corrections and exacerbated supply chain disruptions. Cautious spending patterns by customers, including global enterprises, OEMs and certain domestic cloud clients, are likely to affect demand for mass capacity solutions in the near term, prompting a downward revision for fiscal first-quarter revenue guidance.
To safeguard itself from the ongoing global economic disturbances, Seagate noted that it was focused on lowering production output, cutting costs and streamlining the current year’s capital investment plan.
Moreover, declining trends witnessed in PC shipments in the third quarter of the calendar year 2022 are likely to have negatively impacted HDD sales in the company’s performance in the quarter under review.
However, Seagate is likely to have witnessed continued strong demand for its mass storage capacity solutions, especially nearline products, driven by strong cloud data center demand and recovery in the enterprise market in the to-be-reported quarter.
The company’s mass capacity portfolio is also expected to have witnessed incremental gains from multiple varieties of its 20-terabyte drives in addition to 18-terabyte drives. Seagate’s Lyve Cloud business is likely to have seen healthy traction among customers. Strength in enterprise and video and image applications (VIA) markets also augurs well.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Seagate this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
Seagate has an Earnings ESP of -2.45% and a Zacks Rank #5 (Strong Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are some stocks you may consider as our model shows that these have the right combination of elements to beat on earnings this season.
Chipotle Mexican Grill, Inc (CMG - Free Report) has an Earnings ESP of +2.04% and currently carries a Zacks Rank of 2. Chipotle is set to announce quarterly figures on Oct 25. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Chipotle’s to-be-reported quarter’s earnings and revenues is pegged at $9.11 per share and $2.23 billion, respectively. Shares of CMG have lost 12.7% in the past year.
NETGEAR (NTGR - Free Report) has an Earnings ESP of +8.00% and presently carries a Zacks Rank #3. NETGEAR is slated to release quarterly numbers on Oct 26.
The Zacks Consensus Estimate for NTGR’s to-be-reported quarter’s earnings and revenues is pegged at 8 cents per share and $242.8 billion, respectively. Shares of NTGR have lost 34.2% in the past year.
Equinor (EQNR - Free Report) has an Earnings ESP of +25.07% and currently has a Zacks Rank #1. Equinor is scheduled to report earnings on Oct 28.
The Zacks Consensus Estimate for Equinor’s to-be-reported quarter’s earnings and revenues is pegged at $1.78 per share and $57.7 billion, respectively. Equinor surpassed earnings estimates in the preceding four quarters, delivering an average surprise of 7.3%. Shares of EQNR gained 22.5% in the past year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.