Seagate: Fiscal 1Q13 Financial Results
Q/Q revenue and HDDs shipped down 17% and 13% respectively
This is a Press Release edited by StorageNewsletter.com on November 1, 2012 at 2:45 pm| (in US$ million) | 1Q12 | 1Q13 |
| Revenues | 2,811 | 3,732 |
| Growth | 33% | |
| Net income (loss) | 140 | 582 |
Seagate Technology plc reported financial results for the quarter ended September 28, 2012.
During the first quarter, on a GAAP basis the company reported revenue of approximately $3.7 billion, gross margin of 28.4%, net income of $582 million and diluted earnings per share of $1.42. On a non-GAAP basis, which excludes the net impact of certain items, Seagate reported gross margin of 29.0%, net income of $594 million, and diluted earnings per share of $1.45.
In the September quarter, Seagate generated approximately $1.1 billion in cash from operations, paid cash dividends of $127 million and redeemed approximately 20.5 million ordinary shares or approximately 5% of ordinary shares at the beginning of the fiscal quarter for approximately $669 million. During the nine months ended September 28, 2012, Seagate redeemed approximately 109 million ordinary shares, resulting in an approximate reduction of 17% of the company’s share count. Cash, cash equivalents, restricted cash, and short-term investments totaled approximately $2.5 billion at the end of the first quarter, a sequential increase of approximately $259 million.
"Seagate continues to adapt to dynamic industry conditions, managing inventory and demand with our customers while maintaining investments in our technology portfolio that will position us for continued success in the marketplace over the long-term," said Steve Luczo, Seagate chairman and CEO. "Returning value to shareholders remains a top priority with over 70% of our operating cash flow going towards share redemptions and dividends this quarter."
Quarterly Cash Dividend
The Board of Directors has approved a quarterly cash dividend of $0.32 per share, which will be payable on November 29, 2012 to shareholders of record as of the close of business on November 14, 2012. The payment of any future quarterly dividends will be at the discretion of the Board and will be dependent upon Seagate’s financial position, results of operations, available cash, cash flow, capital requirements and other factors deemed relevant by the Board.
Comments
Seagate vs. WD in 1FQ13
| Seagate |
WD |
Comparison | |
| Revenue* |
3,732 | 4,035 | +8% |
| Net* | 582 | 519 | -11% |
| HDD shipped** | 57.6 | 62.5 |
+9% |
** in million
Details of units shipped in 1FQ13 by Seagate:
- Enterprise: 6.3 million (-9% Y/Y, -26% Q/Q) including 3.3 million, for mission critical applications and 3.0 million for nearline applications
- Client compute: 40.7 million (+22% Y/Y, -12% Q/Q) including 30.3 million mobile HDDs and 20.4 desktop devices
- Non compute: 10.6 million (+1% Y/Y, -5% Q/Q) including 5.8 million CE drives and 4.8 million in branded products
- Total: 57.6 million (+14% Y/Y, -13% Q/Q) representing 42% WW market share according to Seagate for total capacity capacity of 43EB or 747GB per HDD shipped
Abstracts of the earnings call transcript:
Stephen Luczo, chairman, president and CEO:
" (...) we just celebrated the production of our 1 billionth drive from our China operations. We accomplished this remarkable feat in just 17 years, and we expect that the company will ship its 2 billionth disk drive this quarter.
"Despite the reduced addressable market, we effectively balanced supply and demand, shipping approximately 43 exabytes of storage and maintaining market share. Our shipments into the client market declined 12% quarter-over-quarter, which is in line with unit declines reported by other technology companies in the PC space and slightly better than the decline reported in tablet sales.
"The enterprise market was weaker than we expected this quarter, down 26% sequentially. Despite the sequential reduction in the addressable market, on a year-over-year basis, Seagate grow unit shipments by 14% and increased average capacity per drive by 17% to 738 gigabytes.
" (...) our forecast for the December quarter assumes the market to be relatively flat sequentially.
"Based on already completed negotiations associated with the current quarter, we expect that the ASPs will decline about 5% (for the December quarter). We are currently forecasting second fiscal quarter revenues of approximately $3.5 billion, with margins at the lower end of our new long-term range of 27% to 32%."
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