Seagate (STX) saw its stock move lower in after-hours trading on Wednesday despite the company reporting stronger-than-expected results for its second fiscal quarter.
The company reported a surprising profit, with adjusted earnings per share (EPS) being 12 cents, much better than the estimated loss per share of 8 cents.
Revenue was $1.56 billion, down 18% year-over-year, and in line with the consensus.
The adjusted gross margin at 23.6%, compared to 21.4% last year and exceeding the estimated 21.4%. The adjusted operating margin was 8.2%, up from 5.8% year-over-year, surpassing the average analyst estimate of 5.5%.
"Seagate delivered strong financial results in the December quarter, marked by 7% sequential revenue growth and non-GAAP EPS returning to profitability and exceeding the high end of our guidance range," said Dave Mosley, Seagate’s chief executive officer.
“Results were led by improving cloud nearline demand as early signs of market recovery emerge.”
For the third quarter of 2024, Seagate anticipates an EPS of $0.25, with a potential variation of plus or minus $0.20. This outlook exceeded the consensus estimate of $0.20.
Moreover, the company projects revenue for Q3 2024 to be $1.65 billion, with a potential range of plus or minus $150 million, while analysts were looking for $1.64 billion.
Seagate stock was down 1.3% in response to these numbers.