Can Seagate Turn Itself Around With Earnings?
Seagate Technology is expected to report its fiscal first-quarter financial results before the markets open on Friday.
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.
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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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
