Seagate Technology reported financial results for the quarter ended July 1, 2011. Seagate shipped 52 million hard disk drives and reported revenue of $2.9 billion, gross margin of 19.3%, net income of $119 million and diluted earnings per share of $0.27. On a non-GAAP basis, which excludes the net impact of restructuring, write-down of an equity investment, gain on the sale of one of its facilities, and expenses related to the previously announced transaction with Samsung, Seagate reported net income of $126 million and diluted earnings per share of $0.28 for the quarter ended July 1, 2011.
For the fiscal year ended July 1, 2011, the company reported revenue of $11.0 billion, gross margin of 19.6%, net income of $511 million and diluted earnings per share of $1.09. On a non-GAAP basis, which excludes the net impact of loss on redemption of debt, purchased intangibles amortization, restructuring, write-down of an equity investment, gain on the sale of one of its facilities, expenses related to the previously announced transaction with Samsung and tax adjustments related to prior fiscal years, Seagate reported net income of $578 million and diluted earnings per share of $1.24. Additionally, Seagate returned $77 million to shareholders in the form of a dividend and repurchased $822 million of Seagate ordinary shares.
“Seagate and the industry are benefitting from the significant demand for storage related to new applications and architectures associated with mobile and connected devices, Because hard disk drive storage is a fundamental technology for cloud service providers, data centers and all other network-based content providers, total industry demand grew almost 40% in fiscal year 2011 to 330 million terabytes. For the June quarter, Seagate’s average capacity per drive shipped grew to approximately 590 GB an increase of 39% year-over-year. As more online content and services become available to billions of connected mobile devices, we expect demand for storage capacity to continue to grow and Seagate to benefit from this growth.” said Steve Luczo, Seagate chairman, president and CEO.
Related Link: Seagate Q4 FY2011 Financial Statements
For the quarter, revenue totaled $2.4 billion, net income was $158 million, or $0.67 per share, and hard-drive unit shipments were 54 million. The quarterly results included total expenses of $35 million associated with the planned acquisition of Hitachi Global Storage Technologies (Hitachi GST) announced Mar. 7, 2011, and for unrelated litigation accruals. Excluding these expenses, non-GAAP net income was $193 million or $0.81 per share.1
In the year-ago quarter, the company reported revenue of $2.38 billion, net income of $265 million, or $1.13 per share, and shipped 50 million hard drives. The 2010 results included $27 million of expenses related to litigation accruals. Excluding these expenses, the year-ago quarter non-GAAP net income was $292 million, or $1.24 per share.2
The company generated $447 million in cash from operations during the June quarter, ending with total cash and cash equivalents of $3.5 billion.
For fiscal year 2011, the company posted revenue of $9.53 billion and net income of $726 million, or $3.09 per share, compared to fiscal 2010 revenue of $9.85 billion and net income of $1.38 billion, or $5.93 per share. The 2011 net income included total expenses of $44 million associated with the planned acquisition of Hitachi GST and unrelated litigation accruals. Excluding these expenses, fiscal 2011 non-GAAP net income was $770 million or $3.28 per share.1 The 2010 net income included $27 million of expenses related to litigation accruals. Excluding these expenses, fiscal 2010 non-GAAP net income was $1.41 billion, or $6.05 per share.2
“In the June quarter, we were able to meet stronger than anticipated demand, especially from our OEM customers, We believe the stronger demand was driven by increased use of sea freight in advance of the second half of the calendar year as well as supply continuity concerns in the aftermath of the Japan earthquake.
In a challenging HDD market environment in fiscal 2011, the industry saw unit volume growth of four percent while WD achieved growth of six percent as customers demonstrated a continued preference for the WD value proposition.
We remain focused on completing our strategic acquisition of Hitachi GST. We are continuing to engage in the approval process with all the appropriate regulatory agencies and thus far we have received clearance from Brazil, Taiwan and Turkey. We continue to work closely with the remaining agencies which are reviewing our transaction. As previously announced, we now expect that the transaction will close in the fourth calendar quarter of 2011, and our integration planning activities continue on schedule.” – said John Coyne, president and chief executive officer.
Related Link: Western Digital Fourth Quarter Fiscal 2011 Investor Information Summary