Seagate Technology PLC (STX) shares plummeted 7.90% in after-hours trading on Tuesday, despite reporting better-than-expected fourth-quarter earnings. The data storage company's stock took a hit as investors reacted to disappointing guidance for the upcoming quarter.

For the fiscal fourth quarter, Seagate reported non-GAAP earnings of $2.59 per share, surpassing analysts' expectations of $2.45. Revenue for the quarter came in at $2.44 billion, slightly above the forecasted $2.42 billion. The company's performance showed significant improvement compared to the same period last year, with earnings more than doubling from $1.05 per share and revenue increasing from $1.89 billion.

However, the positive earnings results were overshadowed by Seagate's weak outlook for the first quarter of fiscal 2026. The company expects non-GAAP earnings per share of $2.30, plus or minus $0.20, on revenue of $2.5 billion, plus or minus $150 million. This guidance falls short of analysts' projections of $2.36 EPS on revenue of $2.53 billion. The lower-than-anticipated forecast appears to be the primary driver behind the sharp decline in Seagate's stock price during after-hours trading, as investors express concerns about the company's near-term growth prospects in the competitive data storage market.