A further strong growth in hard-disk shipments pushed up Seagate’s (STX) first-quarter revenues and earnings, which also topped analysts’ forecast. Though the company’s stock gained in the premarket soon after the announcement, it retreated into the negative territory as trading progressed.
Adjusted earnings, excluding special items, climbed to $496 million or $1.70 per share in the September quarter from $279 million or $0.96 per share in the year-ago quarter. Analysts had forecast a slower growth. Unadjusted profit totaled $450 million or $1.54 per share, sharply higher than $181 million or $0.62 per share recorded in the first quarter of 2017.
Revenues of the Cupertino, California-based storage device maker advanced about 14% to $2.99 billion during the three-month period, helped by a 41% growth in exabyte shipments to 98.8EB. The top line surpassed market expectations. Average capacity per drive rose to a two-year high of $2.5TB.
“By delivering competitive cost-effective mass storage solutions, Seagate is a crucial supplier in supporting the Data Age digital transformations that are happening across the storage marketplace. We believe our deep storage industry expertise, leading technology portfolio, and focused execution will continue to drive long-term success for the company and deliver value to our shareholders,” said CEO Dave Mosley.
The management repurchased 3 million shares for about $150 million in the first quarter, and declared a quarterly cash dividend of $0.63 per share, to be paid on January 2, 2019. The board of directors approved a repurchase authorization of up to $2.3 billion of shares, raising the total repurchase authority to $3 billion.
Seagate shares dropped about 5% in early trading Friday, after gaining as much in the premarket. The stock had closed the previous trading session sharply higher.