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Factors to Note Ahead of Seagate's (STX) Q2 Earnings Release
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Seagate Technology Holdings plc (STX - Free Report) is scheduled to report second-quarter fiscal 2023 earnings on Jan 25.
The Zacks Consensus Estimate for revenues is pegged at $1.87 billion, which implies a decline of 40.1% from the year-ago quarter’s reported figure. The Zacks Consensus Estimate for earnings is pegged at 17 cents per share, which suggests a decline of 93% from the year-ago quarter’s reported figure.
Management anticipates second-quarter fiscal 2023 revenues of $1.85 billion (+/- 150 million) while non-GAAP EPS for the fiscal second quarter is expected to be 15 cents per share (+/- 20 cents per share).
Seagate Technology Holdings PLC Price and EPS Surprise
The company missed the Zacks Consensus Estimate in three of the last four quarters while surpassing the same in the remaining quarter. It has a trailing four-quarter negative earnings surprise of 11.6%, on average. In the past year, shares of the company have lost 39% of their value compared with the sub-industry’s decline of 35.6%.
Image Source: Zacks Investment Research
Factors Setting the Tone for Q2
Seagate’s performance is likely to have been affected by global macroeconomic weakness, rising interest rates, geopolitical turmoil and surging inflation. The supply-chain issues (although started to ease somewhat) and component shortages continue to remain headwinds along with customer inventory corrections. Enterprise, and video and image applications market is also bearing the brunt of prevailing macroeconomic challenges.
Cautious spending patterns amid macroeconomic weakness by customers, including global enterprise OEMs and certain domestic cloud clients, are likely to affect the demand for mass capacity solutions in near term.
STX is focused on cutting costs to better align with changing market conditions and support its long-term business strategy. In the last reported quarter, the company had announced a restructuring plan to reduce the global workforce by 8% or approximately 3,000 employees, along with other cost-saving initiatives.
This plan is expected to complete by the end of fiscal second-quarter 2023 and result in pre-tax charges (cash-based employee severance and other one-time termination payments) between $60 million and $70 million.
Moreover, declining trends witnessed in PC shipments in fourth-quarter calendar-year 2022 are likely to have negatively impacted HDD sales resulting in affecting the company’s performance in the quarter under review.
Cloud data center demand is likely to have cushioned demand for Seagate’s mass storage capacity solutions, especially its 20-terabyte drives.
What the Zacks Model Unveils
Our proven model does not 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 0.00% and a Zacks Rank #3. 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 Halliburton’s to-be-reported quarter’s earnings and revenues are pegged at 67 cents per share and $5.58 billion, respectively. Shares of HAL are up 46% in the past year.
SAP SE (SAP - Free Report) has an Earnings ESP of +3.09% and presently carries a Zacks Rank #2. SAP is slated to release quarterly numbers on Jan 26.
The Zacks Consensus Estimate for SAP’s to-be-reported quarter’s earnings and revenues are pegged at $1.38 per share and $8.23 billion, respectively. Shares of SAP have lost 14.8% in the past year.
American Airlines Group (AAL - Free Report) has an Earnings ESP of +16.71% and currently has a Zacks Rank #2. AAL is scheduled to report earnings on Jan 26.
The Zacks Consensus Estimate for AAL’s to-be-reported quarter’s earnings and revenues are pegged at 75 cents per share and $12.84 billion, respectively. Shares of AAL are down 0.1% in the past year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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Factors to Note Ahead of Seagate's (STX) Q2 Earnings Release
Seagate Technology Holdings plc (STX - Free Report) is scheduled to report second-quarter fiscal 2023 earnings on Jan 25.
The Zacks Consensus Estimate for revenues is pegged at $1.87 billion, which implies a decline of 40.1% from the year-ago quarter’s reported figure. The Zacks Consensus Estimate for earnings is pegged at 17 cents per share, which suggests a decline of 93% from the year-ago quarter’s reported figure.
Management anticipates second-quarter fiscal 2023 revenues of $1.85 billion (+/- 150 million) while non-GAAP EPS for the fiscal second quarter is expected to be 15 cents per share (+/- 20 cents per share).
Seagate Technology Holdings PLC Price and EPS Surprise
Seagate Technology Holdings PLC price-eps-surprise | Seagate Technology Holdings PLC Quote
The company missed the Zacks Consensus Estimate in three of the last four quarters while surpassing the same in the remaining quarter. It has a trailing four-quarter negative earnings surprise of 11.6%, on average. In the past year, shares of the company have lost 39% of their value compared with the sub-industry’s decline of 35.6%.
Image Source: Zacks Investment Research
Factors Setting the Tone for Q2
Seagate’s performance is likely to have been affected by global macroeconomic weakness, rising interest rates, geopolitical turmoil and surging inflation. The supply-chain issues (although started to ease somewhat) and component shortages continue to remain headwinds along with customer inventory corrections. Enterprise, and video and image applications market is also bearing the brunt of prevailing macroeconomic challenges.
Cautious spending patterns amid macroeconomic weakness by customers, including global enterprise OEMs and certain domestic cloud clients, are likely to affect the demand for mass capacity solutions in near term.
STX is focused on cutting costs to better align with changing market conditions and support its long-term business strategy. In the last reported quarter, the company had announced a restructuring plan to reduce the global workforce by 8% or approximately 3,000 employees, along with other cost-saving initiatives.
This plan is expected to complete by the end of fiscal second-quarter 2023 and result in pre-tax charges (cash-based employee severance and other one-time termination payments) between $60 million and $70 million.
Moreover, declining trends witnessed in PC shipments in fourth-quarter calendar-year 2022 are likely to have negatively impacted HDD sales resulting in affecting the company’s performance in the quarter under review.
Cloud data center demand is likely to have cushioned demand for Seagate’s mass storage capacity solutions, especially its 20-terabyte drives.
What the Zacks Model Unveils
Our proven model does not 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 0.00% and a Zacks Rank #3. 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.
Halliburton Company (HAL - Free Report) has an Earnings ESP of +0.30% and currently carries a Zacks Rank of 2. HAL is set to announce quarterly figures on Jan 24. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Halliburton’s to-be-reported quarter’s earnings and revenues are pegged at 67 cents per share and $5.58 billion, respectively. Shares of HAL are up 46% in the past year.
SAP SE (SAP - Free Report) has an Earnings ESP of +3.09% and presently carries a Zacks Rank #2. SAP is slated to release quarterly numbers on Jan 26.
The Zacks Consensus Estimate for SAP’s to-be-reported quarter’s earnings and revenues are pegged at $1.38 per share and $8.23 billion, respectively. Shares of SAP have lost 14.8% in the past year.
American Airlines Group (AAL - Free Report) has an Earnings ESP of +16.71% and currently has a Zacks Rank #2. AAL is scheduled to report earnings on Jan 26.
The Zacks Consensus Estimate for AAL’s to-be-reported quarter’s earnings and revenues are pegged at 75 cents per share and $12.84 billion, respectively. Shares of AAL are down 0.1% in the past year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.