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Omar Venerio
Omar Venerio
Articles (1736) 

Friday Morning Market Highlights

Markets in the red, shares of Seagate down on financial results

US Markets

U.S. stocks were down on Friday, pulling back from record highs. The Dow fell more than 260 points to 30,914, the S&P 500 index slid 0.57% to 3,831 and the Nasdaq Composite Index was down 0.35% to 13,484.

Gainers

• Danaher Corp (NYSE:DHR) +2.2%

• Salesforce.Com Inc (NYSE:CRM) +1.6%

• Pultegroup Inc (NYSE:PHM) +1.3%

• Ralph Lauren Corp​ (NYSE:RL) +1.3%

• ServiceNow Inc (NYSE:NOW) +0.9%

Losers

• International Business Machines Corp (NYSE:IBM) -10.4%

• Devon Energy Corp (NYSE:DVN) -5.7%

• Halliburton Co (NYSE:HAL) -4.8%

• Hewlett Packard Enterprise Co (NYSE:HPE) -3.2%

• Hess Corp (NYSE:HES) -2.5%

Global Markets

The main European stock markets traded in the red. The U.K.'s FTSE 100 retrated 0.35%, Germany's Dax dipped 0.18%, France's CAC 40 slid 0.62% and Spain's Ibex 35 lost 1.06%.

In Asia, Japan's Nikkei 225 fell 0.44%, India's BSE Sensex slid 1.50%, Hong Kong's Hang Seng lost 1.60% and China's Shanghai Composite was down 0.40%.

Seagate Technology releases earnings report

Shares of Seagate Technology (NASDAQ:STX) fell more than 6.5% on Friday morning after the company announced financial results for its second quarter of fiscal 2021. It posted earnings per share of $1.29, beating analysts' estimates by 16 cents, on revenue of $2.62 billion, which declined 3.0% year-over-year and beat expectations by $60 million.

CEO Dave Mosley had the following to say:

"Seagate delivered strong, double-digit revenue, earnings and free cash flow growth in the December quarter supported by broad-based improvement across nearly every served market and geography, and we had solid customer demand for our mass capacity products."

In the quarter, the gross margin reached 26.5% versus 28.1% in the same quarter of the prior year. The operating margin was 13.3%, down 90 basis points.

Looking at cash generation, Seagate generated $473 million in cash flow from operations and $314 million in free cash. It also paid cash dividends of $167 million and repurchased 18 million ordinary shares for $1 billion.

Looking ahead to the third quarter of fiscal 2021, the company expects revenue of $2.65 billion, plus or minus $200 million, and Non-GAAP diluted earnings per share of $1.30, plus or minus 15 cents.

The stock lost more than 5% so far this year versus the S&P 500's gain of 2.6%.

At the end of December, Parnassus Endeavor Fund (Trades, Portfolio) boosted its investment in the stock by 2.5% to 1,600,000 shares.

Disclosure: The author holds no positions in any stocks mentioned.

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About the author:

Omar Venerio
Omar Venerio is a capital markets, derivatives, corporate finance and financial management professor and Area Head of Finance. He is passionate about the stock market and providing independent fundamental research and hedge fund and insider trading-focused investigation.

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