Seagate Tops Estimates on Cloud Demand for Data Storage

Seagate forecasts return to year-over-year revenue growth in fiscal fourth quarter.
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Seagate Technology PLC  (STX) - Get Report posted better-than-expected earnings for its fiscal third quarter after the bell Thursday and offered upbeat guidance for the current quarter helped by cloud computing demand for high-capacity drives.

Seagate reported non-GAAP earnings of $1.48 a share on revenue of $2.73 billion for the latest period.

The company had been expected to report adjusted net income of $315.9 million, or $1.33 a share, on sales of $2.7 billion, based on a FactSet survey of 26 analysts.

In the same period a year ago, the company posted earnings of $1.38 a share on sales of $2.7 billion. It reported net income of $318 million.

The company offered guidance of $1.15 - $1.45 a share on Jan. 22. Shares have risen 35.6% since then. See January earnings report here.

"We grew revenue, expanded profitability and achieved non-GAAP EPS above our guided range. Our March quarter results underscore the strength of our HDD product portfolio and increasing demand for mass capacity storage," said Dave Mosley, Seagate’s chief executive officer, in a statement.

"These trends lend further support to our June outlook, including an anticipated return to solid year-over-year revenue growth in the June quarter and enhanced profitability," he added.

Seagate projected fiscal fourth-quarter revenue of $2.85 billion, plus or minus $150 million. It forecast non-GAAP diluted EPS of $1.60, plus or minus 15 cents. 

In the upcoming quarter analysts are currently forecasting earnings of $1.54 a share, on sales of $2.8 billion.

Seagate shares fell $2.08, or 2.5%, to $82 in after-hours trading Thursday.

Within the computer hardware space, chip shortages are continuing to hit many industries, especially automakers.

Chip equipment maker Lam Research  (LRCX) - Get Report reported record results Wednesday, as demand for chip-making equipment is seen to be soaring. 

TheStreet.com's Jim Cramer is watching Lam and the rest of the sector closely.