Seagate beats Q3 earnings estimates but misses on revenue

Seagate Technology plc (NASDAQ: STX) surpassed earnings expectations for the third quarter of 2019 while revenues fell short of estimates. Shares jumped 5.9% in morning hours on Tuesday.

Revenues totaled $2.31 billion, down 17% from the year-ago quarter. GAAP net income was $195 million, or $0.69 per share, compared to $381 million, or $1.31 per share, in the prior-year period. Adjusted net income amounted to $235 million, or $0.83 per share.

CEO Dave Mosley said, “We began shipping the industry’s first 16-terabyte high capacity drives in the fiscal third quarter and expect to ramp high volume production in the second half calendar 2019. The Data Age digital transformation has given rise to many new applications including machine learning, autonomous vehicles, and Smart Cities, which all rely on faster access to an increasing amount of data. These trends are creating significant opportunities for our mass data storage solutions and we are successfully executing our technology roadmap to address growing demand.”

During the quarter, the company paid cash dividends of $178 million and repurchased 7.2 million shares for $327 million. Cash and cash equivalents totaled $1.4 billion at the end of the quarter.

Seagate declared a quarterly cash dividend of $0.63 per share, payable on July 3, 2019 to shareholders of record as of June 19, 2019.

For the fourth quarter of 2019, the company expects revenue of approx. $2.32 billion and adjusted EPS of approx. $0.83.

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