Key Takeaways:
Seagate Technology reported fiscal fourth-quarter revenue of $3.6 billion, beating estimates by 3.6%, as cloud data-center demand drove the storage maker's strongest growth in years.
"Our performance is being driven by robust cloud data-center demand and disciplined execution, and we see the momentum continuing in 2027," Chief Executive Officer Dave Mosley said in a statement.
Adjusted earnings of $5.71 a share topped the $5.10 consensus, while adjusted EBITDA of $1.68 billion exceeded estimates of $1.54 billion. Operating margin widened to 43% from 23.2% a year earlier. For the full fiscal year, revenue rose 34% to $12.2 billion, and free cash flow reached a record $3.1 billion.
The results come as China's chip-making advances rattled the broader semiconductor sector. Shares of SK Hynix and Samsung Electronics each fell more than 13% on Tuesday after Chinese memory-chip maker ChangXin Memory Technologies surged 466% on its Shanghai debut and a report emerged that a state-backed company had started mass-producing deep-ultraviolet lithography machines. Seagate stock rose 5.2% in after-hours trading after closing down 8.5% in the regular session.
Mosley said during the earnings call that customers are not cutting long-term planning cycles. Multiple manufacturers have proactively extended their planning horizons to 2029 and beyond, signaling confidence in sustained infrastructure investment, he said.
For the current quarter, Seagate guided revenue of $4.1 billion, well above the $3.77 billion analysts had expected, and adjusted EPS of $7.30, compared with the $5.87 consensus. The guidance implies 56% year-over-year revenue growth, accelerating from the 48% pace in the fourth quarter.
The strong outlook suggests the data-storage upcycle still has room to run. Investors will watch the next earnings call for updates on nearline hard-disk drive pricing and capacity expansion plans.
This article is for informational purposes only and does not constitute investment advice.
