We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Will Seagate Technology (STX) Beat Q2 Earnings Estimates?
Read MoreHide Full Article
We expect Seagate Technology plc (STX - Free Report) to beat expectations when it reports second-quarter fiscal 2017 results on Jan 24.In the last quarter, the company reported a positive earnings surprise of 11.24%. However, it has an average negative earnings surprise of 0.10% over the past four quarters.
Shares of Seagate have underperformed the broader Zacks Computer Storage Devices industry over the last one year. While the industry gained 45.9%, the stock gained 24.4%.
Let’s see how things are shaping up for this announcement.
Why a Likely Positive Surprise?
Our proven model shows that Seagate is likely to beat earnings because it has the right combination of two key ingredients.
Positive Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate ($1.09 per share) and the Zacks Consensus Estimate ($1.07 per share), stands at +1.87%. This is very meaningful and a leading indicator of a likely positive earnings surprise for shares. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank #1 (Strong Buy): Note that stocks with a Zacks Rank of #1, 2 (Buy) or 3 (Hold) have a significantly higher chance of beating earnings estimates. The Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.
The combination of Seagate’s Zacks Rank #1 and +1.87% ESP makes us very confident in looking for an earnings beat.
What is Driving the Better-Than-Expected Earnings?
Seagate is the second-largest manufacturer of HDDs in the U.S. The company offers a portfolio of hard disc drives, solid state drives and solid state hybrid drives. We note that the company’s strategy to trim down its global workforce given a shrinking PC business worldwide is a step in the right direction and will boost the company’s bottom line in the to-be reported quarter.
Moreover, strong demand for hybrid drives also augurs well for the company going into the earnings season. Notably, on Oct 25, Seagate launched the world’s fastest hard drive – Seagate Enterprise Performance 15K HDD v6 for enabling mission critical applications. Also, on Oct 28, 2016 Seagate launched its LaCie line of products targeted at creative professionals. Additionally, Seagate introduced a dedicated game drive for Xbox SSD on Oct 31, which is likely to have a positive impact on the company’s earnings in the to-be reported quarter.
However, declining PC shipments and intensifying competition in the storage space are likely to remain overhangs.
Overall, we expect to witness an earnings beat from Seagate this time around.
Here are some other companies you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Microsoft Corporation (MSFT - Free Report) with an Earnings ESP of +1.28% and a Zacks Rank #2.
TE Connectivity Ltd. (TEL - Free Report) with an Earnings ESP of +1.00% and a Zacks Rank #2.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Will Seagate Technology (STX) Beat Q2 Earnings Estimates?
We expect Seagate Technology plc (STX - Free Report) to beat expectations when it reports second-quarter fiscal 2017 results on Jan 24.In the last quarter, the company reported a positive earnings surprise of 11.24%. However, it has an average negative earnings surprise of 0.10% over the past four quarters.
Shares of Seagate have underperformed the broader Zacks Computer Storage Devices industry over the last one year. While the industry gained 45.9%, the stock gained 24.4%.
Let’s see how things are shaping up for this announcement.
Why a Likely Positive Surprise?
Our proven model shows that Seagate is likely to beat earnings because it has the right combination of two key ingredients.
Positive Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate ($1.09 per share) and the Zacks Consensus Estimate ($1.07 per share), stands at +1.87%. This is very meaningful and a leading indicator of a likely positive earnings surprise for shares. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank #1 (Strong Buy): Note that stocks with a Zacks Rank of #1, 2 (Buy) or 3 (Hold) have a significantly higher chance of beating earnings estimates. The Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.
The combination of Seagate’s Zacks Rank #1 and +1.87% ESP makes us very confident in looking for an earnings beat.
What is Driving the Better-Than-Expected Earnings?
Seagate is the second-largest manufacturer of HDDs in the U.S. The company offers a portfolio of hard disc drives, solid state drives and solid state hybrid drives. We note that the company’s strategy to trim down its global workforce given a shrinking PC business worldwide is a step in the right direction and will boost the company’s bottom line in the to-be reported quarter.
Moreover, strong demand for hybrid drives also augurs well for the company going into the earnings season. Notably, on Oct 25, Seagate launched the world’s fastest hard drive – Seagate Enterprise Performance 15K HDD v6 for enabling mission critical applications. Also, on Oct 28, 2016 Seagate launched its LaCie line of products targeted at creative professionals. Additionally, Seagate introduced a dedicated game drive for Xbox SSD on Oct 31, which is likely to have a positive impact on the company’s earnings in the to-be reported quarter.
However, declining PC shipments and intensifying competition in the storage space are likely to remain overhangs.
Overall, we expect to witness an earnings beat from Seagate this time around.
Seagate Technology PLC Price and EPS Surprise
Seagate Technology PLC Price and EPS Surprise | Seagate Technology PLC Quote
Other Stocks to Consider
Here are some other companies you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Corning Incorporated (GLW - Free Report) with an Earnings ESP of +6.98% and a Zacks Rank #2.You can see the complete list of today’s Zacks #1 Rank stocks here.
Microsoft Corporation (MSFT - Free Report) with an Earnings ESP of +1.28% and a Zacks Rank #2.
TE Connectivity Ltd. (TEL - Free Report) with an Earnings ESP of +1.00% and a Zacks Rank #2.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>