Seagate Technology Reports Fiscal Third Quarter 2013 Financial Results

Seagate Technology Reports Fiscal Third Quarter 2013 Financial Results

CUPERTINO, Calif.--(BUSINESS WIRE)-- Seagate Technology plc (NAS: STX) (the "Company") today reported financial results for the quarter ended March 29, 2013. During the fiscal third quarter, the Company reported revenue of approximately $3.5 billion, gross margin of 26.9%, net income of $416 million and diluted earnings per share of $1.13. On a non-GAAP basis, which excludes the net impact of certain items, Seagate reported gross margin of 27.6%, net income of $464 million and diluted earnings per share of $1.26.

The Company generated $678 million in operating cash flow, repurchased three million ordinary shares for approximately $102 million and paid $379 million for the early redemption of long-term debt. For the first nine months of the fiscal year, the Company has returned 75% of its operating cash flow to shareholders in dividends and share redemptions. Cash, cash equivalents, restricted cash, and short-term investments totaled approximately $2 billion at the end of the fiscal third quarter.

"Seagate's operational results this quarter again reflect strong execution," said Steve Luczo, Seagate's chairman, president and chief executive officer. "The continued advancement of cloud, mobile and open source computing are trends that are shifting data volumes toward personal and corporate cloud environments, creating tremendous opportunities for Seagate's leading storage technology portfolio. Looking ahead, our top priorities are focused on the efficiency of our operations, extending our leadership in storage technology innovation and returning value to shareholders."

For a detailed reconciliation of GAAP to non-GAAP results, see accompanying financial tables.

Seagate has issued a Supplemental Commentary document, which will not be read during today's call, but is available in the "Investors" section of

Quarterly Cash Dividend

The Board of Directors has approved a quarterly cash dividend of $0.38 per share, which will be payable on May 29, 2013 to shareholders of record as of the close of business on May 15, 2013. 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.

Investor Communications

Seagate management will hold a public webcast today at 2:00 p.m. Pacific Daylight Time that can be accessed on its Investor Relations website at During today's webcast, the Company will provide an outlook for its fourth fiscal quarter of 2013, including key underlying assumptions.


A replay will be available beginning today at approximately 6:00 p.m. Pacific Daylight Time at

About Seagate

Seagate is a world leader in hard disk drives and storage solutions. Learn more at

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, each as amended, including, in particular, statements about our plans, strategies and prospects and estimates of industry growth for the fiscal quarter ending June 28, 2013 and beyond. These statements identify prospective information and include words such as "expects," "plans," "anticipates," "believes," "estimates," "predicts," "projects" and similar expressions. These forward-looking statements are based on information available to the Company as of the date of this press release and are based on management's current views and assumptions. These forward-looking statements are conditioned upon and also involve a number of known and unknown risks, uncertainties, and other factors that could cause actual results, performance or events to differ materially from those anticipated by these forward-looking statements. Such risks, uncertainties, and other factors may be beyond the Company's controland may pose a risk to the Company's operating and financial condition. Such risks and uncertainties include, but are not limited to:the uncertainty in global economic conditions, as consumers and businesses may defer purchases in response to tighter credit and financial news; the impact of the variable demand and adverse pricing environment for disk drives, particularly in view of current business and economic conditions; dependence on the Company's ability to successfully qualify, manufacture and sell its disk drive products in increasing volumes on a cost-effective basis and with acceptable quality, particularly the new disk drive products with lower cost structures; the impact of competitive product announcements; possible excess industry supply with respect to particular disk drive products; and the Company's ability to achieve projected cost savings in connection with restructuring plans. Information concerning risks, uncertainties and other factors that could cause results to differ materially from those projected in the forward-looking statements are contained in the Company's Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission on August 8, 2012, and in the Company's Quarterly Report on Form 10-Q filed with the SEC on January 29, 2013, which statements are incorporated into this press release by reference. These forward-looking statements should not be relied upon as representing the Company's views as of any subsequent date and the Company undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date they were made.

(In millions)

March 29,

June 29,

Current assets:
Cash and cash equivalents$1,433$1,707
Short-term investments476411
Restricted cash and investments10193
Accounts receivable, net1,5622,319
Deferred income taxes111104
Other current assets471 767
Total current assets4,9876,310
Property, equipment and leasehold improvements, net2,2562,284
Other intangible assets, net442506
Deferred income taxes413396
Other assets, net169 147
Total Assets$8,743 $10,106
Current liabilities:
Accounts payable$1,698$2,286
Accrued employee compensation264344
Accrued warranty184235
Accrued expenses451531
Current portion of long-term debt4 
Total current liabilities2,6013,396
Long-term accrued warranty138128
Long-term accrued income taxes8784
Other non-current liabilities131138
Long-term debt, less current portion2,474 2,863
Total Liabilities5,4316,609
Total Equity3,312 3,497
Total Liabilities and Equity$8,743 $10,106

The information as of June 29, 2012 was derived from the Company's audited Consolidated Balance Sheet as of June 29, 2012.

(In millions, except per share data)
For the Three Months EndedFor the Nine Months Ended

March 29,


March 30,

March 29,


March 30,

Cost of revenue2,5782,8097,9267,257
Product development294270839737
Marketing and administrative168142457388
Amortization of intangibles20185920
Restructuring and other, net1 1 2 4 
Total operating expenses3,061 3,240 9,283 8,406 
Income from operations4651,2101,6442,051
Interest income2265
Interest expense(53)(59)(163)(185)
Other, net16 6 41 (2)
Other expense, net(35)(51)(116)(182)
Income before income taxes4301,1591,5281,869
Provision for income taxes14 13 38 20 
Net income4161,1461,4901,849
Less: Net income attributable to noncontrolling interest    
Net income attributable to Seagate Technology plc$416 $1,146 $1,490 $1,849 
Net income per share attributable to Seagate Technology plc ordinary shareholders:
Number of shares used in per share calculations:
Cash dividends declared per Seagate Technology plc ordinary share$$0.25$1.02$0.61
(In millions)
For the Nine Months Ended

March 29,


March 30,

Net income$1,490$1,849
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization651597
Share-based compensation5638
Deferred income taxes(14)(5)
Gain on sale of investments(51)(12)
Gain on sale of property and equipment(34)(18)
Loss on redemption and repurchase of debt3117
Other non-cash operating activities, net17
Changes in operating assets and liabilities:
Accounts receivable, net769(983)
Accounts payable(462)191
Accrued employee compensation(85)63
Accrued expenses, income taxes and warranty(124)(28)
Other assets and liabilities308 (66)
Net cash provided by operating activities2,659 1,817 
Acquisition of property, equipment and leasehold improvements(658)(497)
Proceeds from the sale of property and equipment2911
Purchases of short-term investments(227)(382)
Sales of short-term investments201330
Maturities of short-term investments26118
Cash used in acquisition of LaCie S.A., net of cash acquired(36)
Cash used in acquisition of Samsung HDD assets and liabilities(561)
Other investing activities, net(16)16 
Net cash used in investing activities(681)(965)
Repayments of long-term debt and capital lease obligations(421)(670)
Repurchases of ordinary shares(1,612)(1,172)
Dividends to shareholders(381)(266)
Proceeds from issuance of ordinary shares under employee stock plans233214
Escrow deposit for acquisition of noncontrolling shares of LaCie S.A.(72)
Other financing activities, net 3 
Net cash used in financing activities(2,253)(1,891)
Effect of foreign currency exchange rate changes on cash and cash equivalents1  
Decrease in cash and cash equivalents(274)(1,039)
Cash and cash equivalents at the beginning of the period1,707 2,677 
Cash and cash equivalents at the end of the period$1,433 $1,638 

Use of non-GAAP financial information

To supplement the condensed consolidated financial statements presented in accordance with generally accepted accounting principles (GAAP), the Company provides non-GAAP measures of net income, diluted net income per share and gross margin as a percentage of revenue, which are adjusted from results based on GAAP to exclude certain expenses, gains and losses. These non-GAAP financial measures are provided to enhance the user's overall understanding of the Company's current financial performance and our prospects for the future. Specifically, the Company believes non-GAAP results provide useful information to both management and investors as these non-GAAP resul

Read Full Story
Scroll to continue with content AD
  • DJI26935.07-159.73-0.59%
    S&P 5002992.07-14.72-0.49%
  • NIKKEI 22522079.0934.690.16%
    Hang Seng26222.40-213.27-0.81%
  • USD (PER EUR)1.10-0.0038-0.34%
    USD (PER CHF)1.01-0.0003-0.03%
    JPY (PER USD)107.50-0.0130-0.01%
    GBP (PER USD)1.24-0.0043-0.35%
More to Explore