Bangkok--29 Oct--Seagate Technology
Seagate Technology (NASDAQ: STX) today reported disk drive unit shipments of 48 million, revenue of $3.03 billion, net income of $60 million, and diluted net income per share of $0.12 for the quarter ended October 3, 2008. Net income and diluted net income per share for the quarter includes $20 million of purchased intangibles amortization and other charges associated with Seagate’s acquisitions, and charges related to restructuring activities of $51 million. The net impact of these items is a $71 million reduction to net income and a decrease of approximately $0.14 per share on a diluted basis. Of the $51 million related to restructuring activities, approximately $28 million was accelerated depreciation recorded in cost of revenue and $23 million was for severance and other closing costs recorded in restructuring.
“This quarter was marked by Seagate’s measurable progress toward regaining our longstanding product leadership position across all markets,” said Bill Watkins, Seagate chief executive officer. “With a strong balance sheet, Seagate is operating from a position of strength. Looking forward, in the face of a challenging macro-economic environment, we will focus on cost controls and inventory management while continuing to invest in the key technologies that will solidify product leadership. As a result, we remain highly confident in our ability to convert the long-term growth in demand for storage into superior value for our shareholders.”
Additional information relating to the financial results for the first fiscal quarter of 2009 can be found online at seagate.com.
Business Outlook
For the December quarter, Seagate expects to report revenue of $2.85 - $3.05 billion, and diluted net income per share of $0.12 - $0.16. Included in the December quarter outlook is the following:
- Approximately $20 million for purchased intangibles amortization and other charges associated with recent acquisitions
- Approximately $7 million for restructuring charges related to previously announced restructuring events
- Approximately $7 million for accelerated depreciation expenses related to the planned closing of the Pittsburgh research facility (R&D)
The net impact of these items is an estimated reduction to net income of approximately $34 million, and an aggregate decrease in diluted earnings per share by approximately $0.07. The outlook does not include the impact of any future mergers, acquisitions, dispositions or other business combinations, stock repurchases or potential new restructuring activities the company may undertake during the quarter.
Current uncertainty in global economic conditions makes it particularly difficult to predict product demand and other related matters and makes it more likely that Seagate’s actual results could differ materially from current expectations.
Dividend
The company has declared a quarterly dividend of $0.12 per share to be paid on or before November 21, 2008 to all common shareholders of record as of November 7, 2008.
Conference Call
Seagate will hold a conference call to review the fiscal first quarter results at 2:00 p.m. Pacific Time today. The conference call can be accessed online at seagate.com or by phone as follows:
USA: (877) 223-6202
International: (706) 679-3742
Conference ID: 64605834
About Seagate
Seagate is the worldwide leader in the design, manufacture and marketing of hard disk drives and storage solutions, providing products for a wide-range of applications, including Enterprise, Desktop, Mobile Computing, Consumer Electronics and Branded Solutions. Seagate's business model leverages technology leadership and world-class manufacturing to deliver industry-leading innovation and quality to its global customers, with the goal of being the time-to-market leader in all markets in which it participates. The company is committed to providing award-winning products, customer support and reliability to meet the world's growing demand for information storage. Seagate can be found around the globe and at http://www.seagate.com.
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, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements include, but are not limited to, statements related to the company’s future operating and financial performance, including expected revenue, net income and diluted earnings per share, price and product competition, customer demand for our products, and general market conditions. These forward-looking statements are based on information available to Seagate as of the date of this press release. Current expectations, forecasts and assumptions involve a number of risks, uncertainties, and other factors that could cause actual results to differ materially from those anticipated by these forward-looking statements. Such risks, uncertainties, and other factors may be beyond the company's control. In particular, uncertainty in global economic conditions pose a risk to the overall economy as consumers and businesses may defer purchases in response to tighter credit and negative financial news. Such risks and uncertainties also include the impact of the variable demand and the aggressive pricing environment for disk drives, particularly in view of current business and economic conditions; dependence on Seagate’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 and possible excess industry supply with respect to particular disk drive products; our ability to achieve projected cost savings in connection with our announced restructuring plans; and market conditions and alternative cash imperatives that could impact our ability to repurchase additional common shares pursuant to Seagate's previously announced share repurchase program. Information concerning risk, uncertainties and other factors that could cause results to differ materially from those projected in the forward-looking statements is contained in the company's Annual Report on Form 10-K as filed with the U.S. Securities and Exchange Commission on August 13, 2008, which statements are incorporated into this press release by reference. These forward-looking statements should not be relied upon as representing the company's views as of any subsequent date and Seagate undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date they were made.
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