NEW YORK (TheStreet) -- Shares of Seagate Technology (STX) - Get Report were falling 1.2% to $50.06 on heavy trading volume Friday after Micron Technology (MU) - Get Reportmissed analysts' estimates in its fiscal third quarter and offered a light fiscal fourth guidance due to weak PC market trends.
Micron reported earnings of 54 cents a share for the fiscal third quarter, below analysts' estimates of 57 cents a share. The company said revenue fell 3.3% year over year to $3.85 billion for the quarter, compared to analysts' estimates of $3.91 billion.
Looking to its fiscal fourth quarter, Micron said it expects revenue of $3.45 billion to $3.7 billion, below analysts' estimates of $4.16 billion for the quarter.
Seagate is a data storage company incorporated in Dublin, Ireland and headquartered in Cupertino, CA.
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About 4.9 million shares of Seagate were traded by 3 p.m. Friday, above the company's average trading volume of about 3.2 million shares a day.
TheStreet Ratings team rates SEAGATE TECHNOLOGY PLC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate SEAGATE TECHNOLOGY PLC (STX) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. Among the primary strengths of the company is its respectable return on equity which we feel is likely to continue. We feel its strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- SEAGATE TECHNOLOGY PLC's earnings per share declined by 24.8% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, SEAGATE TECHNOLOGY PLC reported lower earnings of $4.52 versus $4.79 in the prior year. This year, the market expects an improvement in earnings ($4.76 versus $4.52).
- The revenue fell significantly faster than the industry average of 33.3%. Since the same quarter one year prior, revenues slightly dropped by 2.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Computers & Peripherals industry and the overall market, SEAGATE TECHNOLOGY PLC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, STX has underperformed the S&P 500 Index, declining 5.22% from its price level of one year ago. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.
- The debt-to-equity ratio of 1.23 is relatively high when compared with the industry average, suggesting a need for better debt level management. Even though the debt-to-equity ratio is weak, STX's quick ratio is somewhat strong at 1.44, demonstrating the ability to handle short-term liquidity needs.
- You can view the full analysis from the report here: STX Ratings Report