Seagate: Fiscal 3Q08 Financial Results

 

Seagate Technology reported disc drive unit shipments of approximately 43 million, revenue of $3.1 billion, GAAP net income of $344 million, and diluted net income per share of $0.65 for the quarter ended March 28, 2008. GAAP net income and diluted net income per share includes approximately $29 million of purchased intangibles amortization and other charges associated with Seagate’s recent acquisitions and also a net gain from asset sales of approximately $4 million. Excluding these items, non-GAAP net income and diluted net income per share were $369 million and $0.70, respectively. Included in both GAAP and non-GAAP results are restructuring and other charges of approximately $20 million or approximately $0.04 per share.

For the nine months ended March 28, 2008, Seagate reported revenue of $9.8 billion, GAAP net income of $1.1 billion, and diluted net income per share of $2.02. GAAP net income and diluted net income per share includes approximately $90 million of purchased intangibles amortization and other charges associated with Seagate’s recent acquisitions and also a net gain from asset sales of approximately $19 million. Excluding these items, non-GAAP net income and diluted net income per share were $1.2 billion and $2.15, respectively. Included in both GAAP and non-GAAP results are restructuring and other charges of approximately $52 million or approximately $0.09 per share.

"We are pleased with Seagate’s solid operational and financial performance in the quarter driven by continued strong global demand for storage products," said Bill Watkins, Seagate CEO. "Further, we delivered strong year-over-year revenue and earnings growth in the third quarter. We continue to believe that there is significant opportunity in the notebook and retail markets — two areas where the company recently has not performed to expectation. We expect to see improved performance in these areas in the June quarter and through the calendar year."

Business Outlook
For the June quarter, Seagate expects to report revenue of $2.85 – $3.0 billion, and GAAP diluted net income per share of $0.37 – $0.41. Excluding approximately $21 million of purchased intangibles amortization and other charges associated with past closed acquisitions, non-GAAP diluted net income per share for the June quarter is expected to fall within the range of $0.41 – $0.45.

This guidance does not include the impact of any future acquisitions, stock repurchases or restructuring activities the company may undertake.

Dividend and Stock Repurchase
The company has declared a quarterly dividend of $0.12 per share to be paid on or before May 16, 2008 to all common shareholders of record as of May 2, 2008.

During the quarter ended March 28, 2008, the company purchased 36 million of its common shares at an average price of $21.79. Additionally, through April 14, under a 10b5-1 qualified stock repurchase plan, Seagate has purchased 9.1 million shares at an average cost of $21.36. The company has authorization to purchase approximately $2.0 billion of additional shares under the current stock repurchase program.

Seagate Technology