Seagate Net Income Jumps To $1.76 Billion As Gross Margin Hits 57.3%
The hard drive maker guided December-quarter revenue to $4.8 billion and retired $1.2 billion of debt.
Seagate, which designs and makes hard disk drives and storage systems, reported fiscal first-quarter net income of $1.76 billion, more than triple the $549 million of a year earlier, on revenue of $4.23 billion. The company, in an 8-K filed Tuesday, also guided to higher sales and earnings for the December quarter.
Margins widen sharply
Revenue for the quarter ended October 2 rose to $4.23 billion from $2.63 billion a year earlier. Net income came to $7.59 per diluted share, against $2.43; on an adjusted basis, earnings were $7.68 per share, up from $2.61.
Gross margin, the share of sales left after production costs, climbed to 57.3% from 39.4%. Operating margin rose to 48.8% from 26.4%.
Free cash flow reached $1.5 billion, versus $427 million a year earlier. CEO Dave Mosley called it the company's "highest ever free cash flow" and pointed to a "multi-year growth phase" backed by long-term customer demand visibility.
Debt cut, dividend raised
Seagate retired about $1.2 billion of debt during the quarter, lowering gross debt to $2.4 billion, and retired another $750 million after quarter-end, bringing it to $1.6 billion. It returned $568 million to shareholders through dividends and buybacks, and held $1.3 billion in cash.
The board raised the quarterly dividend by about 3% to $0.76 per share, payable January 7, 2027, to holders of record on December 23, 2026.
Guidance for the December quarter
For the fiscal second quarter, Seagate guided to revenue of $4.8 billion, plus or minus $100 million, and adjusted earnings of $9.20 per share, plus or minus $0.20.
The company serves cloud and enterprise customers in its Data Center business, which makes up the vast majority of sales, as well as industrial and consumer buyers. A Yahoo Finance preview put the stock at $680.27 in Tuesday morning trading, ahead of the results.
Management holds a webcast Tuesday at 5:00 p.m. Eastern to lay out the assumptions behind its December-quarter outlook.
Sources
- 8-K Filing — Seagate Technology Holdings plc (STX) — SEC EDGAR
- Exhibit stxq12027pressreleasefinan.htm — Seagate Technology Holdings plc 8-K exhibit — SEC EDGAR
- Seagate Stocks Surge 5.6% Before Tonight's 28% Sequential EPS Growth Test — Yahoo Finance
- Learn Why The Bull Case For Seagate (STX) Could Change Following Analyst Upgrades — Yahoo Finance
