Data storage company Seagate Technology on Wednesday posted better-than-expected results for its December quarter. STX stock traded sideways in late trades.
The Fremont, Calif.-based hard drive maker said it earned an adjusted 12 cents per share on $1.6 billion in sales for its fiscal second quarter. On average, analysts polled by FactSet expected Seagate to post an adjusted loss of 6 cents per share on $1.6 billion in sales for the December-ending period.
During the year-earlier period, Seagate earned an adjusted 16 cents per share and the company reported $1.9 billion in sales.
The new results mark a seventh consecutive quarter with sales declining year over year. The company has been stung by a broader slowdown for personal computers and data storage products. But Seagate said Wednesday that demand is improving among cloud operators.
"Results were led by improving cloud nearline (just off the cloud) demand as early signs of market recovery emerge," Chief Executive Dave Mosley said in the news release.
For the current quarter ending in March, Seagate project sales of $1.65 billion, just ahead of Wall Street consensus expectations. Further, the company projects adjusted earnings of 25 cents per share, ahead of expectations of 19 cents, according to FactSet.
STX stock traded flat in after-hours trading on the stock market today, last up a fraction at 89.49.
STX Stock: Technical Analysis
Coming into earnings, STX stock has gained just over 4% in the first month of the year. Last year, Seagate stock gained 62% compared to a 24% gain for the S&P 500 index.
Still, Seagate stock is well below its early 2022 highs.
Prior to Wednesday's report, IBD Stock Checkup showed STX stock with a dismal EPS Rating of 4 out of a best-possible 99, representing its earnings slowdown.
But investors are optimistic about improvements for the stock, as artificial intelligence drives demand for data storage. Seagate's Relative Strength Rating checks in at 94 out of a best-possible 99, indicating STX stock has outperformed 94% of the market over the past 12 months.
Those scores contribute to an IBD Composite Rating of 74 out of a best-possible 99.
