Seagate Reports Q4 Earnings On July 30

Jul.26.12 | About: Seagate Technology (STX)

Seagate Technology PLC (NASDAQ:STX) is scheduled to report its fourth-quarter results on July 30, 2012, after the bell. The street expects EPS and revenue of $2.51 and $4.56B, respectively.

In this article I will recap the historical results of the company, its latest EPS estimates vs. surprises, the latest news from STX and the news from its closest competitors.

Seagate Technology PLC Revenue and Net Income History

Recent EPS Actuals vs. Estimates

The company has met or beaten analysts' estimates in the last four quarters. In the last quarter it reported $2.64 EPS, beating analyst estimates of $2.11.

Seagate Technology PLC EPS Historical Results vs Estimates

The consensus EPS estimate is $2.51 based on 21 analysts' estimates, up from $0.28 a year ago. Revenue estimates are $4.56B, up from $2.86B a year ago. The median target price by analysts for the stock is $27.00.

Average recommendation: Hold

Source: Marketwatch

Analyst Upgrades and Downgrades

  • On July 5, 2012, Robert W. Baird downgraded the company from Outperform to Neutral.
  • On June 28, 2012, The Benchmark Company reiterated Hold rating for the company.
  • On June 7, 2012, Needham reiterated Strong Buy rating for the company.
  • On May 28, 2012, Barclays downgraded the company from Overweight to Equal Weight.
  • On April 18, 2012, RBC Capital Mkts reiterated Sector Perform rating for the company.
  • On April 18, 2012, Barclays reiterated Overweight rating for the company.
  • On February 1, 2012, Needham reiterated Strong Buy rating for the company.
  • On February 1, 2012, Deutsche Bank reiterated Hold rating for the company.
  • On February 1, 2012, Brean Murray reiterated Buy rating for the company.
  • On January 31, 2012, Stifel Nicolaus upgraded the company from Hold to Buy.

Latest News

  • On July 5, 2012, Seagate Technology PLC announced that for the fourth quarter of 2012, it expects to report record revenue of approximately $4.5 billion. These preliminary results compare to the company's previous expectations for revenue of at least $5 billion.
  • On June 25, 2012, Seagate Technology PLC and DensBits Technologies Ltd (DensBits) the inventor of Memory Modem have announced a strategic agreement for the development of low-cost, high-performance Solid State Drives (NYSE:SSD) for the consumer and enterprise markets.
  • On April 26, 2012, Seagate Technology PLC announced that its Board of Directors has authorized the company to repurchase up to $2.5 billion of its outstanding ordinary shares Seagate, as a result of the April 2012 Authorization and other current repurchase authorizations, currently has a total authorized unutilized capacity for repurchases of approximately $3.5 billion under these authorizations.In connection with the April 2012 Authorization, the company also announced that it has terminated its Anti-Dilution Share Repurchase Program, previously authorized by the Board on January 27, 2010 and publicly announced on February 1, 2010.
  • On April 17, 2012, Seagate Technology PLC announced that for fourth quarter of 2012, it expects revenue to be at least $5 billion and for calendar year 2012 it expects revenue to be at least $20 billion.
  • On February 1, 2012, Seagate Technology PLC announced that it expects revenue to be at least $4.3 billion for the third quarter of 2012 and revenue of at least $5 billion in the fourth quarter of 2012.
  • On January 26, 2012, Seagate Technology PLC announced that its Board of Directors has approved an increase to its quarterly cash dividend from $0.18 per share to $0.25 per share, an increase of 39%. The increase is effective with the dividend payable on March 1, 2012 to shareholders of record as of the close of business on February 15, 2012.

Competitors

Western Digital (NASDAQ:WDC) is the major competitor for Seagate. However, for a broader perspective I will include EMC Corporation (NYSE:EMC), Micron Technology (NASDAQ:MU), NetApp (NASDAQ:NTAP) and SanDisk (SNDK) for comparison and the table below provides the key metrics for these companies and the industry.

Seagate Technology PLC key ratio comparison with direct competitors

The chart below compares the stock price changes as a percentage for the selected companies for the last one-year period.

STX ChartClick to enlarge

STX data by YCharts

Competitors' Latest Development

  • On July 19, 2012, SanDisk Corporation announced that for the third quarter of 2012, it expects revenue to be in the range of $1.20 billion, plus or minus $50 million. According to I/B/E/S Estimates, analysts are expecting the company to report revenue of $1.03 billion for the third quarter of 2012.
  • On July 17, 2012, Emc Corp announced that David Goulden, Executive Vice President and CFO, has been appointed President and COO of EMC Corporation, reporting to Tucci.
  • On July 10, 2012, Reuters reported that a group of Elpida Memory Inc bondholders will vote against Micron Technology Inc's plan to acquire the bankrupt Japanese chipmaker for about $750 million, arguing it undervalues the company's assets, a court filing shows.
  • On July 10, 2012, Emc Corp announced that the State of Michigan's IT organization is using EMC storage, software and professional services to further transform how IT services are delivered to agencies and residents.
  • On July 2, 2012, Micron Technology, Inc. and Elpida Memory, Inc.'s trustees announced that the parties have signed a definitive sponsor agreement for Micron to acquire and support Elpida.
  • On June 26, 2012, SanDisk Corporation announced the acquisition of Schooner Information Technology, Inc., an enterprise software company located in Silicon Valley that develops flash-optimized database and data store solutions.
  • On June 14, 2012, Emc Corp announced that Lone Star College System, growing community college system in Texas, has transformed its IT infrastructure with EMC VMAX 10K storage and EMC Avamar, EMC NetWorker and EMC RecoverPoint.
  • On May 31, 2012, Emc Corp announced that it has acquired Montreal-based Watch4net, a privately-held provider of enterprise and carrier-class performance management software that provides real-time, historical and projected visibility into network, data center and cloud infrastructure performance.
  • On May 30, 2012, Origin Energy Limited announced that Transform Solar, a 50:50 solar photovoltaic joint venture between Micron Technology Inc. (Micron) and Origin Energy Limited (Origin), decided to discontinue production of its SLIVER photovoltaic modules in Idaho, United States.
  • On May 23, 2012, NetApp Inc announced that for the first quarter of 2013, it expects revenue to be in the range of $1.40 billion to $1.50 billion, GAAP earnings per share (NYSEARCA:EPS) will be approximately $0.10 to $0.15 per share and non-GAAP earnings per share will be approximately $0.34 to $0.39 per share.
  • On May 22, 2012, EMC Corp announced that it has acquired privately held Syncplicity, Inc. Based in Menlo Park, California, Syncplicity provides native cloud-based sync and share capabilities required by enterprise customers.
  • On May 21, 2012, Western Digital Corporation announced that it has increased authorization of $1.5 billion of its common stock under its share repurchase program. The additional repurchase authorization is effective immediately and extends the program by five years, during which time additional shares can be authorized for repurchase.
  • On May 15, 2012, Western Digital Corporation announced that it has completed divestiture of certain 3.5-inch hard drive assets to Toshiba Corporation, as required by regulatory agencies that conditionally approved the company's completed acquisition of Viviti Technologies Ltd. (formerly Hitachi Global Storage Technologies).
  • On May 10, 2012, Emc Corp announced that it has acquired privately held XtremIO. Flash storage architecture company, based in Herzliya, Israel. The transaction will be in all cash.
  • On May 10, 2012, Micron Technology, Inc. confirmed it is engaged in discussions with Elpida Memory, Inc.'s trustees to acquire Elpida's business. Micron made the announcement following a May 10 approval by the Tokyo District Court allowing Elpida's trustees to negotiate an agreement with Micron, pursuant to which Micron would become Elpida's sponsor and acquire Elpida's entire business in accordance with the corporate reorganization proceedings.
  • On May 7, 2012, Reuters reported that Micron Technology, Inc. has won the right to negotiate exclusively to buy Japanese chip maker Elpida Memory, Inc. after offering more than JPY200 billion ($2.5 billion) for the company.
  • On May 3, 2012, Emc Corp announced that for fiscal 2012, it is confidence in ability to meet and potentially exceed goals of $22 billion in revenue, non-GAAP EPS of $1.70. According to I/B/E/S Estimates, analysts are expecting the Company to report revenues of $22.23 billion and EPS of $1.74 for fiscal 2012.
  • On April 26, 2012, Western Digital Corporation announced that for the fourth quarter of 2012, it expects revenue to be in the range of $4.2-$4.4 billion and non-GAAP earnings per share to be in the range of $2.35-$2.55. According to I/B/E/S Estimates, analysts were expecting the company to report EPS of $2.34 on revenue of $4.18 billion for the fourth quarter of 2012.

Technical Overview


The stock has a market capitalization of $11.25B and is currently trading at $26.45 with a 52-week range of $9.05 - $32.55. The stock's year-to-date performance has been 64.21%. It is currently trading above 20-, 50- and 200-SMA.

Sources: Yahoo Finance, Google Finance, Marketwatch, Finviz, Reuters.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.