Cash Flow from Operations $656 million, up
72% year-over-year
- Diluted Earnings per Share up 82%
year-over-year
- Net Income up 80% year-over-year
- Gross Margin expansion 600 basis points
year-over-year
- Average Capacity per Drive up 30%
year-over-year
Seagate Technology plc (NASDAQ: STX) (the “Company” or
“Seagate”) today reported financial results for the second quarter
of fiscal year 2017 ended December 30, 2016. For the second
quarter, the Company reported revenue of $2.9 billion, gross margin
of 30.8%, net income of $297 million and diluted earnings per share
of $1.00. On a non-GAAP basis, which excludes the net impact of
certain items, Seagate reported gross margin of 31.8%, net income
of $412 million and diluted earnings per share of $1.38.
During the second quarter, the Company generated $656 million in
cash flow from operations, paid cash dividends of $188 million, and
repurchased 4.1 million ordinary shares for $147 million. Cash,
cash equivalents, and short-term investments totaled approximately
$1.7 billion at the end of the quarter. There were 295 million
ordinary shares issued and outstanding as of the end of the
quarter.
“The Company’s product execution, operational performance, and
financial results improved every quarter throughout 2016. In the
December quarter we achieved near record results in gross margin,
cash flow, and profitability. Seagate’s employees are to be
congratulated for their incredible effort,” said Steve Luczo,
Seagate’s chairman and chief executive officer. “Looking ahead, we
are optimistic about the long-term opportunities for Seagate’s
business as enterprises and consumers embrace and benefit from the
shift of storage to cloud and mobile applications. Seagate is well
positioned to work with the leaders in this digital transformation
with a broad market-leading storage solution portfolio.”
For a detailed reconciliation of GAAP to non-GAAP results, see
accompanying financial tables.
Seagate has issued a Supplemental Financial Information
document, which is available on Seagate’s Investors website at
www.seagate.com/investors.
Quarterly Cash Dividend
The Board of Directors of the Company (the “Board”) has approved
a quarterly cash dividend of $0.63 per share, which will be payable
on April 5, 2017 to shareholders of record as of the close of
business on March 22, 2017. 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 Time that can be accessed on its Investor Relations website
at www.seagate.com/investors. During today’s webcast, the Company
will provide an outlook for its third fiscal quarter of 2017,
including key underlying assumptions.
An archived audio webcast of this event will be available on
Seagate’s Investors website at www.seagate.com/investors shortly
following the event conclusion.
About Seagate
To learn more about the Company’s products and services, visit
www.seagate.com and follow us on Twitter, Facebook, LinkedIn,
Spiceworks, YouTube and subscribe to our blog. The contents of our
website and social media channels are not a part of this
release.
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 the Company’s
plans, strategies and prospects, estimates of industry growth, and
dividend and share repurchase plans for the fiscal quarter ending
March 31, 2017 and beyond. These statements identify
prospective information and may include words such as “expects,”
“intends,” “plans,” “anticipates,” “believes,” “estimates,”
“predicts,” “projects,” “should,” “may,” “will,” or the negative of
these words, variations of these words and comparable terminology.
These forward-looking statements are based on information available
to the Company as of the date of this report 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
control and may pose a risk to the Company’s operating and
financial condition. Such risks and uncertainties include, but are
not limited to: items that may be identified during its financial
statement closing process that cause adjustments to the estimates
included in this report; the uncertainty in global economic
conditions; the impact of the variable demand and adverse pricing
environment for disk drives, particularly in view of current
business and economic conditions; 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; the
Company’s ability to achieve projected cost savings in connection
with restructuring plans; possible excess industry supply with
respect to particular disk drive products; disruptions to its
supply chain or production capabilities; unexpected advances in
competing technologies or changes in market trends; the development
and introduction of products based on new technologies and
expansion into new data storage markets; our ability to comply with
certain covenants in our credit facilities with respect to
financial ratios and financial condition tests; currency
fluctuations that may impact the Company’s margins and
international sales; cyber-attacks or other data breaches that
disrupt our operations or results in the dissemination of
proprietary or confidential information and cause reputational
harm; and fluctuations in interest rates. Information concerning
risks, uncertainties and other factors that could cause results to
differ materially from the expectations described in this press
release is contained in the Company’s Annual Report on
Form 10-K filed with the U.S. Securities and Exchange
Commission on August 5, 2016, the “Risk Factors” section of
which is incorporated into this press release by reference, and
other documents filed with or furnished to the Securities and
Exchange Commission. 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.
The inclusion of Seagate’s website address in this press release
is intended to be an inactive textual reference only and not an
active hyperlink. The information contained in, or that can be
accessed through, Seagate’s website and social media channels are
not part of this press release.
SEAGATE TECHNOLOGY PLC
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In millions)
(Unaudited)
December 30, 2016 July 1,2016
(a) ASSETS Current assets: Cash and cash equivalents $
1,716 $ 1,125 Short-term investments — 6 Accounts receivable, net
1,211 1,318 Inventories 1,008 868 Other current assets 205
216 Total current assets 4,140 3,533 Property, equipment and
leasehold improvements, net 2,012 2,160 Goodwill 1,237 1,237 Other
intangible assets, net 364 448 Deferred income taxes 614 616 Other
assets, net 194 219 Total Assets $ 8,561 $ 8,213
LIABILITIES AND EQUITY Current liabilities: Accounts payable
$ 1,631 $ 1,517 Accrued employee compensation 254 184 Accrued
warranty 114 104 Accrued expenses 682 444 Total current
liabilities 2,681 2,249 Long-term accrued warranty 108 102
Long-term accrued income taxes 13 14 Other non-current liabilities
143 164 Long-term debt 4,093 4,091 Total Liabilities 7,038
6,620 Equity: Total Equity 1,523 1,593 Total
Liabilities and Equity $ 8,561 $ 8,213
(a) The information in this column was derived from the
Company’s audited Consolidated Balance Sheet as of July 1,
2016.
SEAGATE TECHNOLOGY PLC
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(In millions, except per share
data)
(Unaudited)
For the Three Months Ended For the Six Months
Ended December 30, 2016 January 1,
2016 December 30, 2016 January
1, 2016 Revenue $ 2,894 $ 2,986 $ 5,691 $ 5,911
Cost of revenue 2,003 2,245 3,999 4,482 Product development 305 304
620 632 Marketing and administrative 155 160 308 341 Amortization
of intangibles 28 31 57 65 Restructuring and other, net 33
17 115 76 Total operating expenses 2,524
2,757 5,099 5,596 Income from
operations 370 229 592 315 Interest income 1 1 2 2 Interest
expense (50 ) (48 ) (100 ) (95 ) Other, net (11 ) (2 ) (11 ) (11 )
Other expense, net (60 ) (49 ) (109 ) (104 ) Income before
income taxes 310 180 483 211 Provision for income taxes 13
15 19 13 Net income $ 297 $ 165
$ 464 $ 198 Net income per share: Basic $ 1.00
$ 0.55 $ 1.56 $ 0.66 Diluted 1.00 0.55 1.55 0.65 Number of shares
used in per share calculations: Basic 296 299 297 301 Diluted 298
301 299 304 Cash dividends declared per ordinary share $
0.63 $ 0.63 $ 1.26 $ 1.17
SEAGATE TECHNOLOGY PLC
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
(In millions)
(Unaudited)
For the Six Months Ended December 30,
2016 January 1, 2016 OPERATING
ACTIVITIES Net income $ 464 $ 198 Adjustments to reconcile net
income to net cash provided by operating activities: Depreciation
and amortization 391 417 Share-based compensation 73 65 Impairment
of long-lived assets 9 — Deferred income taxes 3 — Other non-cash
operating activities, net 18 11 Changes in operating assets and
liabilities:
Accounts receivable, net 110 384 Inventories (140 ) (32 ) Accounts
payable 170 257 Accrued employee compensation 70 (87 ) Accrued
expenses, income taxes and warranty 69 (5 ) Other assets and
liabilities 10 (2 ) Net cash provided by operating
activities 1,247 1,206
INVESTING ACTIVITIES
Acquisition of property, equipment and leasehold improvements (235
) (346 ) Proceeds from the sale of property and equipment (1 ) —
Maturities of short-term investments 6 — Cash used in acquisition
of business, net of cash acquired — (634 ) Other investing
activities, net (4 ) — Net cash used in investing activities
(234 ) (980 )
FINANCING ACTIVITIES Redemption and repurchase
of debt — (15 ) Taxes paid related to net share settlement of
equity awards (24 ) (54 ) Repurchases of ordinary shares (248 )
(1,061 ) Dividends to shareholders (188 ) (351 ) Proceeds from
issuance of ordinary shares under employee stock plans 47 41 Other
financing activities, net — (4 ) Net cash used in financing
activities (413 ) (1,444 ) Effect of foreign currency exchange rate
changes on cash, cash equivalents, and restricted cash (12 ) (3 )
Increase (decrease) in cash, cash equivalents, and restricted cash
588 (1,221 ) Cash, cash equivalents, and restricted cash at the
beginning of the period 1,132 2,486 Cash, cash
equivalents, and restricted cash at the end of the period $ 1,720
$ 1,265
Use of non-GAAP financial information
The Company uses non-GAAP measures of gross margin, net income
and diluted earnings per share, which are adjusted from results
based on GAAP to exclude certain expenses, gains and losses. These
non-GAAP financial measures may be provided to enhance the user’s
overall understanding of the Company’s current financial
performance and its prospects for the future. Specifically, the
Company believes non-GAAP results provide useful information to
both management and investors as these non-GAAP results exclude
certain expenses, gains and losses that it believes are not
indicative of its core operating results and because it is similar
to the approach used in connection with the financial models and
estimates published by financial analysts who follow the
Company.
These non-GAAP results are some of the primary measurements
management uses to assess the Company’s performance, allocate
resources and plan for future periods. Reported non-GAAP results
should only be considered as supplemental to results prepared in
accordance with GAAP, and not considered as a substitute for, or
superior to, GAAP results. These non-GAAP measures may differ from
the non-GAAP measures reported by other companies in its
industry.
SEAGATE TECHNOLOGY PLC
ADJUSTMENTS TO GAAP NET INCOME AND
DILUTED NET INCOME PER SHARE
(In millions, except per share
amounts)
(Unaudited)
For the Three MonthsEnded
December 30, 2016
For the Six MonthsEnded December
30, 2016
Reconciliation of GAAP Net Income: GAAP Net Income $ 297 $ 464
Non-GAAP adjustments: Revenue A (1 ) (1 ) Cost of revenue B 29 54
Product development C 2 2 Marketing and administrative D 1 —
Amortization of intangibles E 27 54 Restructuring and other, net F
33 115 Other expense, net G 24 23 Non-GAAP net income
$ 412 $ 711 Reconciliation of GAAP Diluted Net
Income Per Share: GAAP $ 1.00 $ 1.55 Non-GAAP $ 1.38 $ 2.38 Shares
used in diluted net income per share calculation 298 299
A
For the three and six months ended December 30, 2016,
Revenue has been adjusted on a non-GAAP basis to exclude revenue on
certain discontinued products that had previously recognized a
sales return provision.
B
For the three and six months ended December 30, 2016, Cost of
revenue has been adjusted on a non-GAAP basis to exclude
amortization of intangibles associated with acquisitions and
accelerated depreciation and write off of certain fixed assets
related to restructuring.
C
For the three and six months ended December 30, 2016, Product
development expenses have been adjusted on a non-GAAP basis to
exclude accelerated depreciation and write off of certain fixed
assets related to restructuring and other charges.
D
For the three months ended December 30, 2016, Marketing and
administrative expenses have been adjusted on a non-GAAP basis
primarily to reflect the impact of certain strategic development
costs.
E
For the three and six months ended December 30, 2016, Amortization
of intangibles primarily related to our acquisitions has been
excluded on a non-GAAP basis.
F
For the three and six months ended December 30, 2016, Restructuring
and other net, has been adjusted on a non-GAAP basis primarily
related to reductions in our workforce as a result of our ongoing
focus on cost efficiencies in all areas of our business.
G
For the three and six months ended December 30, 2016, Other
expense, net has been adjusted on a non-GAAP basis to exclude the
impairment of a certain strategic investment.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170124006226/en/
Seagate Technology plcEric DeRitis,
408-658-1561eric.deritis@seagate.com
Grafico Azioni Seagate Technology (NASDAQ:STX)
Storico
Da Lug 2024 a Ago 2024
Grafico Azioni Seagate Technology (NASDAQ:STX)
Storico
Da Ago 2023 a Ago 2024