Seagate
Technology provided preliminary financial results for its fiscal second
quarter ended December 30, 2011. The acquisition of Samsung Electronics
hard disk drive business closed on December 19, 2011 and these
preliminary financial results include Samsung operating activity from
that date.
The company shipped approximately 47 million disk drives, which included
approximately 700,000 Samsung disk drives, and expects to report revenue
for its fiscal second quarter 2012 of $3.1 - $3.2 billion.
Wall Street had
projected revenue of $2.79 billion.
Before giving effect
to charges related to the acquisition of Samsung’s hard disk drive
business that are not yet determinable, the company expects gross margin
as a percent of revenue to be at least 30.5%, operating expenses
(Product Development, Marketing and Administrative) to be approximately
$390 million, and diluted outstanding shares to be 440 million.
“The better than expected results for the December quarter are
attributed to the company’s outstanding operational performance and
overall strong execution,” said Steve Luczo, Seagate CEO and chairman.
“Due to our best-in-class operations, diversified supply-chain and
differentiated manufacturing footprint, we continuously optimized our
builds for customers during the quarter. This is best evidenced by our
company’s ability to increase the average capacity per drive shipped
quarter-over-quarter to a record 653 gigabytes, despite the significant
supply chain disruption. These results also reflect the hard work and
resiliency of the Seagate teams and our strategic suppliers who are
working to help the industry recover from the massive disruption caused
by the flooding in Thailand.”
Cash, cash equivalents, and marketable securities at the end of the
December quarter totaled more than $2.1 billion, inclusive of
substantial outflows of approximately $1.2 billion during the quarter
for matured debt and cash consideration for the Samsung transaction.
Update to Fiscal Third Quarter 2012 Financial Outlook
The
company continues to believe that during calendar 2012 unit demand will
exceed supply and combined with the high growth rate in the demand for
raw storage, the exabyte shortage will be more pronounced than the unit
shortage, and as a result pricing is expected to remain stable.
The company’s outlook for the March 2012 quarter excludes certain costs
related to integration activities, transition support services and
acquisition related costs associated with the acquisition of Samsung’s
hard disk drive operations as they are not yet determinable.
Specifically for the March 2012 quarter, and before giving effect to the
acquisition related charges referenced above, the company expects unit
shipments to increase as compared to the December quarter, revenue of
$4.2-$4.5 billion, gross margin as a percent of revenue of at least 33%,
and operating expenses (Product Development, Marketing and
Administrative) to be approximately $415 million. Based on the shares
outstanding at the beginning of the March 2012 quarter, diluted
outstanding shares are expected to be approximately 480 million.
Arbitration Award
These preliminary results and fiscal
third quarter outlook provided do not include the arbitration award
disclosed on November 21, 2011.
Seagate
Technology provided preliminary financial results for its fiscal second
quarter ended December 30, 2011. The acquisition of Samsung Electronics
hard disk drive business closed on December 19, 2011 and these
preliminary financial results include Samsung operating activity from
that date.