Seagate Beats Earnings, Rev Down - Analyst Blog
02 Maggio 2013 - 3:27PM
Zacks
Seagate Technology plc (STX) reported
third-quarter 2013 earnings per share of $1.26, which exceeded the
Zacks Consensus Estimate of $1.19.
Revenue
Seagate reported revenues of $3.53 billion in the third quarter
of 2013, down 20.8% from $4.45 billion in the year-ago period. The
Hard Disk Drive (HDD) industry continues to witness a lack of
consistent visibility due to weak customer response globally.
This has curbed Seagate’s ability to generate meaningful growth.
In order to counter these adverse effects, the company is adopting
strategies like new product introduction, market segmentation to
facilitate its business performance.
Operating Results
Gross profit was $948.0 million, down from $1.64 billion in the
prior-year quarter. Gross margin was 26.9% versus 36.9% 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 related
factors.
Operating margin in the quarter also moved down 13.2% year over
year from 27.2% reported in the year-ago quarter.
On a GAAP basis, net income was $416.0 million or $1.13 per
share, compared with $1146.0 million or $2.48 per share in the
comparable quarter last year. Excluding the impact of one-time
items, adjusted net income was $464.0 million or $1.26 per
share.
Balance Sheet, Cash Flow
Cash and cash equivalents were approximately $1.90 billion at
the end of the quarter versus $1.87 billion in the previous
quarter. Accounts receivables decreased to $1.56 billion from $1.65
billion in the prior quarter. Seagate’s long-term debt stood at
$2.47 billion.
Seagate generated $678 million from operating activities, up
from $844.0 million in the previous quarter. In the reported
quarter, the company has returned $381 million to shareholders
through dividends.
Guidance
For the fourth quarter, Revenue is expected to be in the range
of $3.3 billion to $3.45 billion, non-GAAP operating expenses to
remain relatively flat.
Our Take
Seagate reported mixed third-quarter results, with revenue
decreasing substantially and EPS exceeding our expectation. The
lack of visibility in the HDD industry is also a concern for the
company.
Despite the ongoing cost control measures, the company has not
been able to support its margins. 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).
Investors can also consider companies like Facebook
Inc. (FB) with a Zacks Rank #1 (Strong Buy) and
Symantec Corp. (SYMC) with a Zacks Rank #2.
FACEBOOK INC-A (FB): Free Stock Analysis Report
SEAGATE TECH (STX): Free Stock Analysis Report
SYMANTEC CORP (SYMC): Free Stock Analysis Report
WESTERN DIGITAL (WDC): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
Grafico Azioni Seagate Technology (NASDAQ:STX)
Storico
Da Giu 2024 a Lug 2024
Grafico Azioni Seagate Technology (NASDAQ:STX)
Storico
Da Lug 2023 a Lug 2024