For the quarter ended Jan. 1, the Fremont, Calif., company reported net income per share slipped 6.7% to $1.12 from $1.20 in the year-earlier quarter. The latest adjusted earnings were $1.29 a share.
Revenue slipped 2.7% to $2.62 billion from $2.7 billion.
A survey of analysts by FactSet produced consensus estimates of profit of $1.01 a share, or an adjusted $1.13, on revenue of $2.56 billion.
Shares of Seagate at last check were off 5.7% at $59.33.
"Seagate delivered strong, double-digit revenue, earnings and free cash flow growth in the December quarter, supported by broad-based improvement across nearly every served market and geography, and we had solid customer demand for our mass capacity products," Chief Executive Dave Mosley said in a statement.
Benchmark analyst Mark Miller raised his price target on Seagate stock to $70 from $60 and affirmed a buy rating. In October, he'd raised the rating to buy from hold with the $60 target.
"The recovery in enterprise demand is expected to continue, offsetting some seasonal March quarter weakness in consumer-related drive sales," Miller said in a note published Thursday.
"This recovery should also aid margins. Further improvements in margins are expected in 2021, as covid-related costs wane and factory utilization improves."
For the fiscal third quarter, Seagate expects adjusted earnings of $1.30 a share, plus or minus 15 cents. Revenue should come in at $2.65 billion, plus or minus $200 million, the company estimated.
The FactSet survey is looking for Q3 adjusted profit of $1.32 a share on revenue of $2.67 billion.
Investment banking firm Evercore said the second-quarter figures were “a relatively positive report,” though “perhaps not living up to [management's] positive commentary” during the quarter, Bloomberg reported.
"The results showed positive enterprise trends, but concerns clearly remain about the company’s ability to drive higher [gross margins] despite increasing enterprise exposure," Evercore analysts said.