Seagate Technology Reports Fiscal Second Quarter 2007 Results

Seagate Technology Reports Fiscal Second Quarter 2007 Results

Seagate Technology (NYSE: STX) today reported revenue of $3.0 billion, GAAP net income of $140 million, and diluted earnings per share of $0.23 for the quarter ended December 29, 2006. Included in the $3.0 billion of revenue is approximately $200 million from legacy Maxtor designed products. Net income and diluted earnings per share includes approximately $76 million of charges directly associated with the Maxtor acquisition and $19 million for the early retirement of the 8% notes. Excluding these charges, non-GAAP net income and diluted earnings per share were $236 million and $0.39.

For the six months ended December 29, 2006 Seagate reported revenue of $5.8 billion, GAAP net income of $159 million and diluted earnings per share of $0.27. Net income and diluted earnings per share includes charges of approximately $158 million directly associated with the Maxtor acquisition, $19 million for the early retirement of the 8% notes and a $3 million favorable adjustment to the restructuring reserve. Excluding these charges, non-GAAP net income and diluted earnings per share were $333 million and $0.56. Adjustments made to GAAP net income and diluted earnings per share can be found with the financial statements included with this press release.

“Seagate just delivered the industry’s first $3 billion quarter, and 30% growth over our year-ago quarter,” said Bill Watkins, Seagate’s chief executive officer. “These results are driven by the explosive growth in digital content and the resulting growth in demand for storage, as well as by our ability to deliver a broadening suite of products to a growing set of customers. This solid quarter reflects better than expected desktop pricing during the quarter, the successful transition of Maxtor customers to more cost-effective, higher margin Seagate products, and continued operational excellence. With the Maxtor integration substantially complete and exciting new products hitting the market in the current quarter, Seagate is on a path to further increase profitability in the traditionally slower back half of the fiscal year.

“During the December quarter, we shipped a record 7 million disc drives for consumer electronics applications, increased our shipments into the mobile compute market by 52% year-over-year, and continued to solidify our substantial lead in the enterprise and desktop markets. Additional highlights of the quarter include the start of OEM qualification of Seagate’s 1.8-inch products; the successful launch of the re-branded Seagate and Maxtor external storage products which included four new Seagate external storage solutions; and the expansion of Seagate’s services business with the announced acquisition of EVault, Inc. Our employees have much to be proud of as I believe Seagate’s product and operational execution, as well as the company’s market presence and visibility, have never been stronger. We have laid the foundation for continued success and growing profitability in 2007.”

Read the complete Press Release