Q2 Preview: Seagate (STX) Shrinking Inventories, Expanding Margins Should Make for Fun Quarter
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Seagate Technology PLC (NYSE: STX) is lower today ahead of their second quarter earnings release, expected out after the market closes today. Shares are down 2.5% today.
STX is expected to report EPS of $0.33 with revs of $2.72 billion. Last quarter, the Dublin, Ireland, company reported EPS of $0.37 with revs of $2.7 billion, both missing the Street consensus. In Q210, Seagate 'blew the doors' off of expectations, posting EPS of $1.03 on revs of $3.03 billion.
Shares gained 28.6% through the quarter to $15.03 at the end of December 2010. The stock is down 5.3% from the end of last quarter, and ended 2010 about 20% lower.
A simple valuation puts Seagate with a forward P/E of 7.2x FY12 EPS estimates, compared to 9.4x for Western Digital (NYSE: WDC), its direct U.S. competitor.
Data from Bloomberg has 15 analysts with a Buy on STX, 19 with a hold, and one suggesting to Sell. The analyst price target average is $31, with a high of $37 and low of $20.
Summary
Seagate is expecting Q211 sales of at least $2.7 billion and a 19.5% gross margin. The Street was looking for sales of $2.7 billion at the time.
Seagate is expected to release their Q211 earnings on Wednesday, January 19, 2011, at approximately 4:00pm EST. Stay tuned to StreetInsider.com's EPS Central section to see our analysis of the highly-anticipated quarterly results withi0 n seconds of their release.
STX is expected to report EPS of $0.33 with revs of $2.72 billion. Last quarter, the Dublin, Ireland, company reported EPS of $0.37 with revs of $2.7 billion, both missing the Street consensus. In Q210, Seagate 'blew the doors' off of expectations, posting EPS of $1.03 on revs of $3.03 billion.
Shares gained 28.6% through the quarter to $15.03 at the end of December 2010. The stock is down 5.3% from the end of last quarter, and ended 2010 about 20% lower.
A simple valuation puts Seagate with a forward P/E of 7.2x FY12 EPS estimates, compared to 9.4x for Western Digital (NYSE: WDC), its direct U.S. competitor.
Data from Bloomberg has 15 analysts with a Buy on STX, 19 with a hold, and one suggesting to Sell. The analyst price target average is $31, with a high of $37 and low of $20.
Summary
Seagate is expecting Q211 sales of at least $2.7 billion and a 19.5% gross margin. The Street was looking for sales of $2.7 billion at the time.
- Brean, Murray, Carret & Co. thinks that Seagate will report earnings ahead of the Street consensus. Brean is looking for EPS in the range of $0.35 - $0.38 with revs of $2.7 - $2.8 billion. BMC also 'envisions' Q311 revs of about $2.6 billion and EPS of $0.32 - $0.34.
Brean, Murray, Carret is looking for shipments toward the lower end of 51 - 52 drives and a gross margin of 20%. They also expect sequential blended ASP declines in the 3% - 5% range.
Brean rates STX at Buy, with a $18 price target.
Seagate is expected to release their Q211 earnings on Wednesday, January 19, 2011, at approximately 4:00pm EST. Stay tuned to StreetInsider.com's EPS Central section to see our analysis of the highly-anticipated quarterly results withi0 n seconds of their release.
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