Seagate Q4 falls short as does outlook, but cloud and data center demand solid

Seagate's fiscal fourth quarter had a bevy of moving parts that crimped results, but cloud and data center demand was strong. Nevertheless, Seagate's outlook disappointed.

The storage company reported fourth quarter earnings of 64 cents a share ($1.20 non-GAAP) on revenue of $2.52 billion. For fiscal 2020, Seagate reported earnings of $3.79 a share on revenue of $10.51 billion.

Wall Street was looking for fourth quarter non-GAAP earnings of $1.29 a share on revenue of $2.62 billion.

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For the first quarter, Seagate projected revenue of $2.3 billion, give or take $200 million, with non-GAAP earnings of 85 cents a share give or take 15 cents a share.

Wall Street was expecting first quarter earnings of $1.27 a share non-GAAP on revenue of $2.59 billion.

Seagate CEO Dave Mosley said the company saw "robust cloud and data center demand," but the quarter was hit by demand in video and image, mission critical and consumer markets.

Mosley added:

Entering fiscal year 2021, the level of macro uncertainty remains high and we will continue to carefully manage our cash and expenses. However, we anticipate demand across our end markets to improve within the next six months and currently model revenue to be fairly flat in fiscal year 2021, supported by the strength of our mass capacity product portfolio. Longer-term, the unabated growth in data at the edge and in the cloud is driving secular demand for mass capacity storage.