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Investing.com -- Seagate Technology Holdings plc (NASDAQ:STX) shares jumped 5% after the data storage giant reported fiscal first-quarter earnings that exceeded analyst expectations, driven by robust demand for its high-capacity storage products.
The company posted adjusted earnings of $2.61 per share for the quarter ended October 3, significantly beating the analyst estimate of $2.40. Revenue reached $2.63 billion, surpassing the consensus expectation of $2.55 billion and marking a 21% increase YoY.
"Seagate delivered strong September quarter results, with revenue growth of 21% year-over-year and non-GAAP EPS exceeding the high end of our guided range," said Dave Mosley, Seagate’s chair and chief executive officer. "Our performance underscores the team’s strong execution and robust customer demand for our high-capacity storage products."
Gross margin reached record levels, with GAAP gross margin at 39.4% and non-GAAP gross margin at 40.1%. The company generated $532 million in cash flow from operations and $427 million in free cash flow during the quarter.
Looking ahead, Seagate provided guidance for the fiscal second quarter, projecting revenue between $2.6 billion and $2.8 billion, with the midpoint slightly above the analyst consensus of $2.67 billion. The company expects adjusted earnings per share between $2.55 and $2.95, with the midpoint of $2.75 also exceeding the consensus estimate of $2.67.
Seagate also announced it is ramping shipments of its areal density-leading Mozaic HAMR products, which are now qualified with five of the world’s largest cloud customers. The company increased its quarterly cash dividend by approximately 3% to $0.74 per share.
During the quarter, Seagate returned $182 million to shareholders through dividends and share repurchases, demonstrating confidence in its financial position and future prospects.