Seagate Beats EPS, Revenues Exceed - Analyst Blog
30 Gennaio 2013 - 1:51PM
Zacks
Seagate Technology plc (STX) reported
second-quarter 2013 earnings per share (EPS) of $1.38, which
exceeded the Zacks Consensus Estimate of $1.27.
Revenue
Seagate reported revenues of $3.67 billion in the second quarter
of 2013, up 14.7% from $3.20 billion in the year-ago period. The
company’s hard disk drive demand is improving based on a marginal
increase in demand from the server and pc makers.
Operating Results
Gross profit was $992.0 million, down from $1.01 billion in the
prior-year quarter. Gross margin was 27.0% versus 31.6% in the
prior-year quarter. The decline in gross margin was primarily due
to an adverse effect on pricing as well as due to some cost
issues.
Operating income in the quarter also moved down 8.3% year over
year to $555.0 million. This was due to a surge in cost and
expenses, which increased 20.2%, compared with the year-ago
period.
On a GAAP basis, net income was $492.0 million or $1.30 per
share, compared with $563.0 million or $1.28 per share in the
comparable quarter last year. Excluding the impact of one-time
items, adjusted net income was $523.0 million or $1.38 per
share.
Balance Sheet, Cash Flow
Cash and cash equivalents were approximately $1.87 billion at
the end of the quarter versus $2.37 billion in the previous
quarter. Accounts receivables decreased to $1.65 billion from $1.68
billion in the prior quarter. Seagate’s long-term debt remained at
$2.82 billion.
The company generated $844.0 million from operating activities,
down from $1.13 billion in the previous quarter. The company has
returned $1.1 billion to shareholders through share redemptions and
dividends.
Our Take
Seagate reported decent second-quarter results, with revenue
improving substantially and EPS exceeding our expectation. Some
recovery in the HDD industry and improvement in demand aided
Seagate to become the leading player in the market.
The company has been able to control costs and increase the sale
of high-margin products. Moreover, Seagate is coming up with new
products to cater to new customers and penetrate new markets with
customized products Seagate also has a significant exposure to
high-end corporate desktop and enterprise server markets compared
with its rival Western Digital Corp. (WDC).
Currently, Seagate has a Zacks Rank #3 (Hold). We recommend
investors to consider other data storage devices stocks that are
faring well. Imation Corp. (IMN) and
Xyratex Ltd. (XRTX) has Zacks Rank #2 (Buy).
IMATION CORP (IMN): Free Stock Analysis Report
SEAGATE TECH (STX): Free Stock Analysis Report
WESTERN DIGITAL (WDC): Free Stock Analysis Report
XYRATEX LTD (XRTX): Free Stock Analysis Report
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