Seagate to Report Q2 Earnings: Here's What Investors Should Know

Earnings Report and Estimates - Seagate Technology Holdings plc (STX) is scheduled to report second-quarter fiscal 2025 earnings on Jan 21 [1] - The Zacks Consensus Estimate for second-quarter fiscal 2025 earnings is $1 88 per share, unchanged in the past 60 days [2] - The Zacks Consensus Estimate for revenues is$ 2 31 billion, indicating a 48 6% increase from the year-ago quarter [2] - Management anticipates second-quarter fiscal 2025 revenues to be $2 3 billion (+/-$ 150 million) and non-GAAP earnings to be $1 85 per share (+/- 20 cents) [3] - STX's earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, with an average surprise of 85 1% [3] Factors Driving Performance - Seagate expects continued improvements in mass capacity due to strengthening nearline demand from global cloud customers and improvement in the enterprise & OEM markets [4] - Cloud service providers are focusing on AI applications and cloud infrastructure development, with HDDs expected to play a key role in AI adoption [5] - Secular trends and innovations in aerial density are likely to have spurred mass capacity storage demand [6] - The launch of the Mozaic 3+ hard drive platform with Heat-Assisted Magnetic Recording technology has positioned Seagate well in the mass capacity storage solutions market [6] - 24TB CMR/28TB SMR drives now represent the second-highest revenue product, contributing over 20% of total nearline revenues in the last reported quarter [6] Revenue and Margin Expectations - Mass capacity revenues are expected to increase 75 6% year over year to$ 1,861 5 million in the fiscal second quarter [7] - HDD segment revenues are estimated at $2,133 5 million, a 54 2% increase from the year-ago quarter [7] - Non-HDD segment revenues are estimated at$ 171 1 million, unchanged from the prior-year level [7] - Non-GAAP gross margin is expected to be 34%, up from 23 6% in the prior year quarter, driven by a higher mix of mass capacity revenues and ongoing pricing actions [8] - Non-GAAP operating expenses are expected to be $285 million in the fiscal second quarter [8] Other Stocks to Consider - V F Corporation (VFC) has an Earnings ESP of +4 30% and a Zacks Rank 1, with quarterly earnings scheduled for Jan 29 [11][12] - Packaging Corporation of America (PKG) has an Earnings ESP of +0 96% and a Zacks Rank 2, with quarterly earnings scheduled for Jan 28 [13] - American Airlines Group Inc (AAL) has an Earnings ESP of +3 99% and a Zacks Rank 1, with quarterly earnings scheduled for Jan 23 [14]