Seagate Technology PLC (NASDAQ: STX) is set to report its fiscal first-quarter financial results before the markets open on Friday. The consensus estimates from Thomson Reuters call for $0.59 in earnings per share (EPS) on revenue of $2.94 billion. The same period from the previous year had $1.34 in EPS on $3.78 billion in revenue.
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This company may have recently disappointed investors with its guidance, and a rival merger might add pressure as well, but the storage giant reported recently that its board of directors has approved a 17% increase in the targeted regular cash dividend. With an earnings warning, most companies might be more reluctant to hike their payout. Seagate’s targeted annual dividend will rise to $2.52 from $2.16 per share. Its new quarterly rate of $0.63 per share will be paid on November 20, 2015.
Seagate announced back in August that it had entered into a definitive agreement under which a wholly owned indirect subsidiary of Seagate will commence a tender offer for all the outstanding shares of Dot Hill in an all-cash transaction valued at $9.75 per share. The consideration represented a 50% premium over the preceding three-month stock price average. The total transaction is valued at roughly $694 million, and it is worth noting that Dot Hill has $49 million in cash on its balance sheet.
Ahead of the earnings report a few analysts made calls on Seagate:
- Brean Capital reiterated a Buy rating.
- Deutsche Bank reiterated a Buy rating.
- Jefferies reiterated a Buy rating but lowered its price target to $52.50 from $60.
- Stifel reiterated a Hold rating.
- BMO reiterated a Market Perform rating with a $48 price target.
So far in 2015, Seagate has vastly underperformed the market, with the stock down 39% year to date. Over the past 52 weeks, the stock has fallen 31%.
Shares of Seagate were trading down 3% at $38.15 Thursday afternoon, with a consensus analyst price target of $46.79 and a 52-week trading range of $36.80 to $69.40.
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