Seagate Technology (STX) stock experienced a decline in late Tuesday trading, despite the company reporting fiscal first quarter earnings and sales that surpassed expectations. The data storage company’s guidance for current quarter revenue also aligned with analyst projections.
Seagate announced that it had earned an adjusted $1.58 per share on sales of $2.17 billion for the quarter ending in September. Analysts surveyed by FactSet had anticipated Seagate to report adjusted earnings of $1.48 per share on sales of $2.13 billion.
In a news release, Seagate Chief Executive Dave Mosley expressed satisfaction with the company’s performance, stating, “Seagate is off to an outstanding start to the fiscal year, highlighted by gross margin expanding to the highest level in more than a decade.”
In comparison, in the same period the previous year, Seagate had reported an adjusted loss of 22 cents per share on sales of $1.45 billion.
For the upcoming quarter, Seagate provided guidance for sales of $2.3 billion at the midpoint of its range, which was consistent with analyst expectations for the quarter ending in December, according to FactSet.
Despite the positive earnings and guidance, Seagate’s stock was down more than 2% in recent after-hours trading, standing at 110.
Seagate is recognized as the world’s largest manufacturer of hard disk drives. The company faced challenges in 2022 and the first half of last year due to a hard drive supply glut and decreased demand from PC manufacturers. However, the rebound in demand from datacenters and enthusiasm surrounding AI technologies have contributed to the stock’s recovery. Year-to-date, Seagate’s shares have advanced by 35% and are approaching an all-time high above 116, which was achieved at the beginning of 2022.
Prior to the earnings report, Seagate’s stock closed at 112.64 in regular Tuesday trading. The company had an IBD Composite Rating of 79 out of a possible 99, according to IBD Stock Checkup. The Composite Rating combines five proprietary ratings into a single score, with the top growth stocks typically having a rating of 90 or higher.
Additionally, Seagate’s Relative Strength Rating stood at 87 out of 99, indicating that the stock has outperformed 87% of all stocks in IBD’s database over the past year.
Before the earnings announcement, Seagate’s stock was trading within a 5% buy zone above a 110.93 cup-with-handle buy point, as reported by MarketSurge. The stock had broken out from the pattern on October 14.
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