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Hard-Drive Maker Seagate’s Revenue, Profit Beat Estimates

January 24, 2017

CA: Corporations In CaliforniaCA: Corporations In California
A logo sign outside of a facility occupied by Seagate Technology in Fremont, California on January 23, 2016. Photograph by Kristoffer Tripplaar — AP

Hard-disk drive maker Seagate Technology reported higher-than-expected profit and revenue, helped by strong demand for its cloud-based storage products.

The company’s shares (STX) rose 4.2% to $39 in after-market trading on Tuesday.

The hard-disk drive maker has been focusing on cloud-based products as businesses cut spending on traditional storage systems.

The company said in July it would cut about 6,500 jobs, or 14% of its workforce, by the end of fiscal 2017, as part of a major restructuring.

Seagate also said earlier this month that it plans to shut its Suzhou factory in China.

The company’s net income rose to $297 million, or $1 per share, in the second quarter ended Dec. 30, from $165 million, or 55 cents per share.

Excluding items, the company earned $1.38 per share in the quarter, beating the average analyst estimate of $1.08 per share, according to Thomson Reuters I/B/E/S.

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Revenue fell 3.1% to $2.89 billion, but beat the average estimate of $2.82 billion.

Rival Western Digital will report its second-quarter results on Wednesday.