Factors to Note Ahead of Seagate's (STX) Q1 Earnings Release
Seagate Technology Holdings plc STX is scheduled to report first-quarter fiscal 2024 earnings on Oct 26.
The Zacks Consensus Estimate is pegged at a loss of 18 cents per share. STX reported earnings per share of 48 cents in the prior-year quarter. The consensus estimate for revenues is pegged at $1.52 billion, suggesting a decline of 25.4% on a year-over-year basis.
Management anticipates first-quarter fiscal 2024 revenues to be $1.55 billion (+/- $150 million). Non-GAAP loss is expected to be 16 cents per share (+/- 20 cents).
The company has a negative earnings surprise of 52.4%, on average, in the trailing four quarters.
Seagate Technology Holdings PLC Price and EPS Surprise
Seagate Technology Holdings PLC price-eps-surprise | Seagate Technology Holdings PLC Quote
Factors to Note
Seagate’s performance is likely to have been affected by global macroeconomic turmoil (especially the economic slowdown in China) and surging inflation. The supply-chain issues and component shortages continue to remain headwinds.
The company’s nearline demand among large customers is being affected due to budget tightening by clients amid an uncertain macro environment. The company expects system revenues to decline owing to reduced IT spending by some large customers. Also, the company’s margin is likely to be affected by higher underutilization costs.
Our estimate for revenues from the HDD segment is pegged at $1,301.5 million, indicating a plunge of 26.5% year over year. The estimate for the non-HDD (which includes enterprise data solutions, cloud systems and solid-state drives) segment is pegged at $215.1 million, implying a decrease of 18.2% year over year. Mass capacity shipments are likely to have suffered due to a slowdown in the company’s cloud business.
However, the company’s performance is expected to have gained from the rapid adoption of the 20+TB platform and volume ramp for HAMR (heat-assisted magnetic recording) 30+TB qualification units.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Seagate this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here, as elaborated below.
Seagate has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are some stocks you may consider as our model shows that these have the right combination of elements to beat on earnings this season.
Cummins CMI will release third-quarter 2023 results on Nov 2. The company has an Earnings ESP of +0.48% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Cummin’s to-be-reported quarter’s earnings and revenues is pegged at $4.70 per share and $8.19 billion, respectively. Shares of CMI have gained 1% in the past year.
Oshkosh Corporation OSK will release third-quarter 2023 results on Oct 26. The company has an Earnings ESP of +8.24% and a Zacks Rank #3.
The Zacks Consensus Estimate for Oshkosh’s to-be-reported quarter’s earnings and revenues is pegged at $2.18 per share and $2.46 billion, respectively. Shares of OSK have gained 6.7% in the past year.
Pinterest PINS has an Earnings ESP of +1.21% and a Zacks Rank #1. PINS is set to report its third-quarter 2023 results on Oct 30.
The Zacks Consensus Estimate for PINS’ to-be-reported quarter’s earnings and revenues is pegged at 21 cents per share and $742.6 million, respectively. Pinterest shares have gained 18.1% in the past year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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Seagate Technology Holdings PLC (STX) : Free Stock Analysis Report
Cummins Inc. (CMI) : Free Stock Analysis Report
Oshkosh Corporation (OSK) : Free Stock Analysis Report
Pinterest, Inc. (PINS) : Free Stock Analysis Report
