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Seagate (STX) to Report Q4 Earnings: What's in the Cards?

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Seagate Technology Plc (STX - Free Report) is scheduled to release fourth-quarter fiscal 2018 results on Jul 30.

In the last reported quarter, Seagate delivered a positive earnings surprise of 7.35%. Earnings of $1.46 per share surged 32.7% on a year-over-year basis.

Revenues came in at $2.80 billion, up 4.8% year over year. The improvement in both top and bottom line figures was driven by strong demand and adoption of Seagate’s storage drives.

For fourth-quarter fiscal 2018, the Zacks Consensus Estimate for earnings is pegged at $1.45 per share and that for revenues is $2.81 billion.

Let’s see how things are shaping up for this announcement.
 

 

Factors to Consider

Seagate is riding on advancement of cloud storage technologies in the industry, exponential growth in stored data, Nearline’s rapid adoption, stable hard disk drives (HDD) pricing environment and low inventory levels. We believe this will drive results in the soon-to-be reported quarter for Seagate.

Further, growing HDD requirement due to strong demand for high-capacity mass-storage solutions remains a positive for the company. Also, growth in PC shipment is expected to aid the company in the fourth quarter.

Moreover, increasing adoption of mass storage solutions across the company’s edge and enterprise markets is a tailwind.

Seagate stated that Exabyte demand is increasing on a year-over-year basis across most of the markets it caters to. This is expected to drive top-line growth.

However, intensifying competition from Western Digital (WDC - Free Report) remains a concern.

What Our Model Says

According to the Zacks model, a company with Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) along with a positive Earnings ESP has a good chance of beating estimates. The Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.

Seagate has a Zacks Rank #3 and an Earnings ESP of 0.00%, which makes surprise prediction difficult. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are a couple of stocks you may consider as our proven model shows these have the right combination of elements to post an earnings beat this quarter:

NetApp (NTAP - Free Report) with an Earnings ESP of +1.12% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank  stocks here.

Cisco Systems (CSCO - Free Report) with an Earnings ESP of +0.36% and a Zacks Rank #2.

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