Seagate stock gains after Q4 results crush estimates

Storage device maker Seagate Technology (STX) continues to ride the wave of rapid adoption of cloud computing across industries, and reported above-consensus earnings for the fourth quarter. The company’s stock gained more than 3% soon after the earnings announcement Monday.

Seagate posted net income of $475 million or $1.62 per share for the fourth quarter, which was above analysts’ forecast. Unadjusted profit climbed to $461 million or $1.57 per share from $114 million or $0.38 per share in the same period last year.

Related: Seagate Q4 2018 Earnings Call Transcript

At $2.84 billion, revenues were higher by 17.8% compared to the same quarter last year and broadly in line with expectations. The top-line increased for the third successive quarter, and came in above the management’s guidance. Revenues and margins benefitted significantly from a further sharp increase in demand and the favorable pricing environment.

The Cupertino, California-based company shipped about 93 exabytes of storage capacity during the three-month period, up 49% compared to last year. Average capacity per drive climbed 39% to $2.5 terabytes.

Revenues benefitted from a further sharp increase in demand and the favorable pricing environment

“Seagate’s year-over-year revenue and profitability growth results for fiscal year 2018 reflect solid execution and strong demand for our mass storage products. Looking ahead, we are confident that storage infrastructure demand will continue to grow with the Data Age digital transformations being fueled by new technologies, emerging industries and growing businesses,” said CEO Dave Mosley.

During the quarter, the company’s board of directors declared a cash dividend of $0.63 per share – to be paid on October 3, 2018, to shareholders of record as on September 19, 2018.

Western Digital (WDC), which competes with Seagate in the storage market, last week reported higher revenues and earnings for its fourth quarter, which far exceeded expectations.

Seagate’s Shares are up 27% since the beginning of the year. The stock, which lost more than 2% in premarket trading Monday, rebounded after the earnings announcement.

RELATED: Seagate Q4 2018 earnings call transcript