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Factors to Note Ahead of Seagate's (STX) Q4 Earnings Release (Revised)
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Seagate Technology Holdings plc (STX - Free Report) is scheduled to report fourth-quarter fiscal 2023 earnings on Jul 26.
The Zacks Consensus Estimate is pegged at a loss of 21 cents per share. STX reported earnings of $1.59 per share in the prior-year quarter. The consensus estimate for revenues is pegged at $1.68 billion, suggesting a decline of 36% on a year-over-year basis.
Management anticipates fourth-quarter fiscal 2023 revenues to be $1.7 billion (+/- $150 million). Non-GAAP loss is expected to be 20 cents per share (+/- 20 cents).
The company has a negative earnings surprise of 61.8%, on average in the training four quarters. In the past year, shares of STX have lost 22.8% of their value compared with the sub-industry’s gain of 0.2%.
Image Source: Zacks Investment Research
Factors Setting the Tone for Q4
Seagate’s performance is likely to have been affected by global macroeconomic turmoil (especially lower economic activity in China) and inflation. The company’s nearline demand among large customers is being affected due to elongated customer inventory correction and reduced IT hardware budgets.
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. The enterprise, and video and image applications market have also been suffering from prevailing macroeconomic challenges.
Moreover, declining trends witnessed in PC shipments in second-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.
Our estimate for revenues from the HDD segment is pegged at $1,448.4 million, indicating a plunge of 40% year over year. The estimate for the non-HDD (which includes enterprise data solutions, cloud systems and solid-state drives) segment is pegged at $234.8 million, implying an increase of 7.7% year over year.
STX is focused on cutting costs to better align with changing market conditions and support its long-term business strategy. It is focusing on higher-return products and end markets while rationalizing resources for non-core businesses. In March, management 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 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.
Seagate Technology Holdings PLC Price and EPS Surprise
Nonetheless, the company is likely to benefit from rapid adoption of 20+TB platform and volume ramp for HAMR (heat-assisted magnetic recording) 30+TB qualification units.
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 -15.75% 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 TYL’s to-be-reported quarter’s earnings and revenues is pegged at $1.86 per share and $490.7 million, respectively. Shares of TYL have rallied 10% in the past year.
Chipotle Mexican Grill (CMG - Free Report) has an Earnings ESP of +1.01% and a Zacks Rank #2. CMG is scheduled to report earnings on Jul 26.
The Zacks Consensus Estimate for CMG’s to-be-reported quarter’s earnings and revenues is pegged at $12.21 per share and $2.52 billion, respectively. Shares of CMG have gained 55.5% in the past year.
Meta Platforms (META - Free Report) has an Earnings ESP of +5.83% and presently carries a Zacks Rank #2. META is set to report second-quarter 2023 results on Jul 26.
The Zacks Consensus Estimate for META’s to-be-reported quarter’s earnings and revenues is pegged at $2.87 per share and $30.87 billion, respectively. Shares of META have surged 78.7% in the past year
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
(We are reissuing this article to correct a mistake. The original article, issued earlier today, should no longer be relied upon.)
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Factors to Note Ahead of Seagate's (STX) Q4 Earnings Release (Revised)
Seagate Technology Holdings plc (STX - Free Report) is scheduled to report fourth-quarter fiscal 2023 earnings on Jul 26.
The Zacks Consensus Estimate is pegged at a loss of 21 cents per share. STX reported earnings of $1.59 per share in the prior-year quarter. The consensus estimate for revenues is pegged at $1.68 billion, suggesting a decline of 36% on a year-over-year basis.
Management anticipates fourth-quarter fiscal 2023 revenues to be $1.7 billion (+/- $150 million). Non-GAAP loss is expected to be 20 cents per share (+/- 20 cents).
The company has a negative earnings surprise of 61.8%, on average in the training four quarters. In the past year, shares of STX have lost 22.8% of their value compared with the sub-industry’s gain of 0.2%.
Image Source: Zacks Investment Research
Factors Setting the Tone for Q4
Seagate’s performance is likely to have been affected by global macroeconomic turmoil (especially lower economic activity in China) and inflation. The company’s nearline demand among large customers is being affected due to elongated customer inventory correction and reduced IT hardware budgets.
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. The enterprise, and video and image applications market have also been suffering from prevailing macroeconomic challenges.
Moreover, declining trends witnessed in PC shipments in second-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.
Our estimate for revenues from the HDD segment is pegged at $1,448.4 million, indicating a plunge of 40% year over year. The estimate for the non-HDD (which includes enterprise data solutions, cloud systems and solid-state drives) segment is pegged at $234.8 million, implying an increase of 7.7% year over year.
STX is focused on cutting costs to better align with changing market conditions and support its long-term business strategy. It is focusing on higher-return products and end markets while rationalizing resources for non-core businesses. In March, management 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 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.
Seagate Technology Holdings PLC Price and EPS Surprise
Seagate Technology Holdings PLC price-eps-surprise | Seagate Technology Holdings PLC Quote
Nonetheless, the company is likely to benefit from rapid adoption of 20+TB platform and volume ramp for HAMR (heat-assisted magnetic recording) 30+TB qualification units.
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 -15.75% 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.
Tyler Technologies (TYL - Free Report) has an Earnings ESP of +0.54% and currently sports a Zacks Rank #1. TYL is scheduled to report quarterly numbers on Jul 26. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for TYL’s to-be-reported quarter’s earnings and revenues is pegged at $1.86 per share and $490.7 million, respectively. Shares of TYL have rallied 10% in the past year.
Chipotle Mexican Grill (CMG - Free Report) has an Earnings ESP of +1.01% and a Zacks Rank #2. CMG is scheduled to report earnings on Jul 26.
The Zacks Consensus Estimate for CMG’s to-be-reported quarter’s earnings and revenues is pegged at $12.21 per share and $2.52 billion, respectively. Shares of CMG have gained 55.5% in the past year.
Meta Platforms (META - Free Report) has an Earnings ESP of +5.83% and presently carries a Zacks Rank #2. META is set to report second-quarter 2023 results on Jul 26.
The Zacks Consensus Estimate for META’s to-be-reported quarter’s earnings and revenues is pegged at $2.87 per share and $30.87 billion, respectively. Shares of META have surged 78.7% in the past year
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
(We are reissuing this article to correct a mistake. The original article, issued earlier today, should no longer be relied upon.)