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Here's What to Expect From Seagate's (STX) Q3 Earnings Release
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Seagate Technology Holdings plc (STX - Free Report) is scheduled to report third-quarter fiscal 2023 earnings on Apr 20.
The Zacks Consensus Estimate for earnings and revenues is pegged at 19 cents per share and $1.97 billion, implying a decline of 89.5% and 29.7%, respectively, from the year-ago quarter’s reported figure.
Management anticipates third-quarter fiscal 2023 revenues to be $2 billion (+/- 150 million) while non-GAAP EPS is expected to be 25 cents (+/- 20 cents).
The company missed the Zacks Consensus Estimate in three of the last four quarters and surpassed once. It has a trailing four-quarter negative earnings surprise of 0.8%, on average. In the past year, shares of STX have lost 22.3% of their value compared with the sub-industry’s decline of 27.9%.
Image Source: Zacks Investment Research
Factors Setting the Tone for Q3
Seagate’s performance is likely to have been affected by global macroeconomic turmoil (especially the economic slowdown in China), rising interest rates and surging inflation. The supply-chain issues (although started to ease somewhat) and component shortages continue to remain headwinds along with customer inventory corrections. The enterprise, and video and image applications market has also been bearing the brunt of prevailing macroeconomic challenges.
Seagate Technology Holdings PLC Price and EPS Surprise
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 the near term.
STX is focused on cutting costs to better align with changing market conditions and support its long-term business strategy. In March, the company announced another round of layoffs, which will affect about 1% of its total headcount or about 480 employees.
The new restructuring is expected to be considerably completed by the end of fourth-quarter fiscal 2023. This particular action will cost Seagate total pre-tax charges between $55 million and $65 million. In October 2022, Seagate had announced a restructuring plan to reduce the global workforce by 8% or approximately 3,000 employees, along with other cost-saving initiatives.
Moreover, declining trends witnessed in PC shipments in first-quarter calendar-year 2023 are likely to have negatively impacted HDD sales. This, in turn, may have affected STX’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. Continued momentum seen for CORVAULT products is likely to have driven the top line.
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 -37.50% 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 Meta’s to-be-reported quarter’s earnings and revenues is pegged at $1.97 per share and $27.49 billion, respectively. Shares of META are up 5.1% in the past year.
Spotify Technology (SPOT - Free Report) has an Earnings ESP of +25.96% and presently carries a Zacks Rank #2. SPOT is slated to release quarterly numbers on Apr 25.
The Zacks Consensus Estimate is pegged at a loss of $1.04 per share and $3.36 billion for revenues, respectively. Shares of SPOT are up 0.3% in the past year.
Kimberly-Clark Corporation (KMB - Free Report) has an Earnings ESP of +6.71% and currently has a Zacks Rank #2. KMB is scheduled to report quarterly earnings on Apr 25.
The Zacks Consensus Estimate for KMB’s to-be-reported quarter’s earnings and revenues is pegged at $1.31 per share and $5.08 billion, respectively. Shares of KMB are up 9.9% in the past year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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Here's What to Expect From Seagate's (STX) Q3 Earnings Release
Seagate Technology Holdings plc (STX - Free Report) is scheduled to report third-quarter fiscal 2023 earnings on Apr 20.
The Zacks Consensus Estimate for earnings and revenues is pegged at 19 cents per share and $1.97 billion, implying a decline of 89.5% and 29.7%, respectively, from the year-ago quarter’s reported figure.
Management anticipates third-quarter fiscal 2023 revenues to be $2 billion (+/- 150 million) while non-GAAP EPS is expected to be 25 cents (+/- 20 cents).
The company missed the Zacks Consensus Estimate in three of the last four quarters and surpassed once. It has a trailing four-quarter negative earnings surprise of 0.8%, on average. In the past year, shares of STX have lost 22.3% of their value compared with the sub-industry’s decline of 27.9%.
Image Source: Zacks Investment Research
Factors Setting the Tone for Q3
Seagate’s performance is likely to have been affected by global macroeconomic turmoil (especially the economic slowdown in China), rising interest rates and surging inflation. The supply-chain issues (although started to ease somewhat) and component shortages continue to remain headwinds along with customer inventory corrections. The enterprise, and video and image applications market has also been bearing the brunt of prevailing macroeconomic challenges.
Seagate Technology Holdings PLC Price and EPS Surprise
Seagate Technology Holdings PLC price-eps-surprise | Seagate Technology Holdings PLC Quote
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 the near term.
STX is focused on cutting costs to better align with changing market conditions and support its long-term business strategy. In March, the company announced another round of layoffs, which will affect about 1% of its total headcount or about 480 employees.
The new restructuring is expected to be considerably completed by the end of fourth-quarter fiscal 2023. This particular action will cost Seagate total pre-tax charges between $55 million and $65 million. In October 2022, Seagate had announced a restructuring plan to reduce the global workforce by 8% or approximately 3,000 employees, along with other cost-saving initiatives.
Moreover, declining trends witnessed in PC shipments in first-quarter calendar-year 2023 are likely to have negatively impacted HDD sales. This, in turn, may have affected STX’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. Continued momentum seen for CORVAULT products is likely to have driven the top line.
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 -37.50% 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.
Meta Platforms (META - Free Report) has an Earnings ESP of +8.00% and currently flaunts a Zacks Rank of #1. META is set to announce quarterly figures on Apr 26. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Meta’s to-be-reported quarter’s earnings and revenues is pegged at $1.97 per share and $27.49 billion, respectively. Shares of META are up 5.1% in the past year.
Spotify Technology (SPOT - Free Report) has an Earnings ESP of +25.96% and presently carries a Zacks Rank #2. SPOT is slated to release quarterly numbers on Apr 25.
The Zacks Consensus Estimate is pegged at a loss of $1.04 per share and $3.36 billion for revenues, respectively. Shares of SPOT are up 0.3% in the past year.
Kimberly-Clark Corporation (KMB - Free Report) has an Earnings ESP of +6.71% and currently has a Zacks Rank #2. KMB is scheduled to report quarterly earnings on Apr 25.
The Zacks Consensus Estimate for KMB’s to-be-reported quarter’s earnings and revenues is pegged at $1.31 per share and $5.08 billion, respectively. Shares of KMB are up 9.9% in the past year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.