Seagate Technology plc (STX) Tuesday reported a surge in second-quarter profit, as revenues and margins improved significantly. Both earnings and revenues for the quarter came in ahead of Street estimates.
Seagate's net income for the second quarter rose to $563 million or $1.28 per share from $150 million or $0.31 per share in the year-ago quarter.
On an adjusted basis, net income for the quarter was $581 million or $1.32 per share, compared with $159 million or $0.33 per share in the year-ago quarter.
On average, 21 analysts polled by Thomson Reuters expected the company to report earnings of $1.08 per share. Analysts' estimate typically excludes certain special items.
Revenue for the quarter grew to $3.195 billion from $2.719 billion in the year-ago quarter. Twenty Street analysts had a consensus revenue estimate of $3.150 billion.
The company shipped 47 million disk drives in the second quarter, down from 48.9 million disk drives in the year-ago quarter and 51 million disk drives in the first quarter.
Gross margin for the quarter improved to 31.6 percent from 19.5 percent in the corresponding quarter last year.
Income from operations for the quarter nearly tripled to $605 million from $206 million last year.
Seagate closed its acquisition of the hard disk drive business of Samsung Electronics Co., Ltd on December 19. For the ongoing third quarter ending March 30, the company expects amortization of acquisition-related intangibles of about $35 million.
Last week, the Dublin, Ireland-headquartered company raised its quarterly cash dividend 39 percent to $0.25 per share from $0.18 per share previously, effective with the dividend payable on March 1, 2012 to shareholders of record as of the close of business on February 15, 2012.
The company had also announced an additional $1 billion authorization for its share repurchase program. The previous authorization had a balance of $0.9 billion, which is expected to be utilized by the end of June.
Seagate's rival Western Digital Corp. (WDC) reported a drop in second-quarter profit and revenue, with volumes dropping to 28.5 million units, sharply lower than 52.2 million units last year. Results for the quarter include charges and expenses of $199 million related to the Thailand flooding and expenses of $14 million associated with the planned acquisition of Hitachi Global Storage Technologies or HGST. Western Digital's gross margin jumped to 32.5 percent compared to 19.2 percent in the year-ago quarter.
STX closed Tuesday's regular trade at $21.14, up $0.25 or 1.20%, on the Nasdaq. In after-hours, the stock gained $1.26 or 5.96%. Over the past year, the stock traded in a range of $9.05 - $21.00.
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