The stock price of Seagate Technology PLC (NASDAQ:STX) plunged more than 11% to $51.52 per share after the company reported financial results for its fiscal second quarter that missed the consensus estimates of Wall Street analysts.

Financial results

The disk drive manufacturer posted $1.32 earnings per share, lower than the $1.38 earnings per share consensus estimate of analysts surveyed by Thomson Reuters.

Seagate Technology PLC (NAADAQ:STX) said its revenue declined 4% to $3.53 billion from $3.67 billion in the same period a year ago. The figure was slightly lower than the $3.56 billion revenue anticipated by analysts.

During the period, the company generated $856 million operating cash flow, paid $142 million dividends, and repurchased 33 million shares worth approximately $1.5 billion. Seagate Technology PLC (NASDAQ:STX) ended the quarter with $2.3 billion cash, cash equivalents, restricted cash, and short-term investments.

In a statement, Steve Luczo, chairman and CEO of Seagate Technology PLC (NASDAQ:STX) said, “Seagate’s results in the December quarter reflect discipline in managing the profitability of our business and strong operational execution. We continue to strategically invest in our product portfolio and enhance our vertically integrated manufacturing capabilities to effectively capitalize on the cloud, mobile and open source storage trends that are being fueled by data growth.”

Luczo added, “Our cash flow was very strong this quarter, and combined with the execution of our capital allocation strategy, we are on track to meet our goal of returning 70% of our operating cash flow to shareholders this fiscal year.”

Analyst reiterates Buy rating

Richard Kugele, analyst at Needham & Co. reiterated his Buy rating for the shares of Seagate Technology PLC (NASDAQ:STX) with a $62 price target. According to him, “At first glance STX’s F2Q performance was somewhat disappointing, however the outlook of the company was essentially unchanged with solid margin and cash flow.

“After years of strong cash flow and margin stability roused even the grouchiest of bears from their caves into upgrades recently, a stronger performance was likely required,” said Kugele.

During the company’s earnings call, Luczo told analysts that the company expects the drive industry to operate in range of 130 million to 145 million units. According to him, Seagate Technology PLC (NASDAQ:STX) expects the industry to operate in that range. He added,   “Within that range arguing about whether or not it’s an extra 1 million or 2 million units is not what drives the business models of the company.”