Seagate Technology PLC STX reported soft results for its fiscal fourth quarter this week, and its sales are likely to remain flat in fiscal 2021, according to Benchmark.
The Seagate Technology Analyst: Mark Miller downgraded Seagate Technology from Buy to Hold.
The Seagate Technology Takeaways: The data storage company reported disappointing results for the fourth quarter of fiscal 2020, while the September quarter guidance was also below expectations, Miller said in the Wednesday downgrade note. (See his track record here.)
Seagate Technology reported non-GAAP earnings of $1.20 per diluted share, missing expectations by 9 cents, while sales of $2.52 billion were $100 million below expectations, the analyst said.
Although the cloud and data center demand remained strong during the quarter, “continued economic uncertainty and COVID-19 related disruptions impacted demand in other key end markets including video and image applications, mission critical and consumer markets,” he said.
Miller added that a negative mix shift and higher logistics and labor costs amid the virus spread also hurt Seagate's profitability.
Benchmark expects the softness to persist for the next two quarters, and the analyst said Seagate's guidance reflects flat sales through fiscal 2021.
The Seagate analyst lowered earnings estimates for fiscal 2021 by 84 cents to $4.76 per share versus an estimated $4.96 in fiscal 2020.
STX Price Action: Shares of Seagate Technology were down 8.66% at $44.36 at last check Wednesday.
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