Data storage company Seagate Technology PLC (NASDAQ:STX) disclosed a year-on-year decline in revenues but a marked gross margin improvement in today’s second-quarter trading update.
Top-line sales for the quarter totalled $1.56 billion, down 17% from last year’s second quarter, but operational efficiencies propelled gross margins up from 13% to 23.3%.
Operating margins returned from the red in 2023 to close the second quarter at 8%.
On an adjusted basis, Seagate’s diluted earnings per share (EPS) came to $0.12, though the quarter was a lossmaker on an actual basis to the tune of -$0.09 per share.
Operational cash flow was reported at $169 million, coupled with a healthy free cash flow of $99 million, enabling Seagate to return $146 million to its shareholders through dividends.
Looking forward, Seagate anticipates a revenue of approximately $1.65 billion in the fiscal third quarter of 2024, with an adjusted diluted EPS of around $0.25.
Dave Mosley, Seagate’s chief executive, remarked: "Seagate delivered strong financial results in the December quarter marked by 7% sequential revenue growth and non-GAAP EPS returning to profitability and exceeding the high end of our guidance range.
“Results were led by improving cloud nearline demand as early signs of market recovery emerge."
Seagate shares fell slightly in morning exchanges, trading 0.8% lower at $88.48 at the time of writing.