Hard-drive maker Seagate technology plc (STX: Quote) said Monday after the markets closed that its second quarter profit fell 13% from last year, as higher costs and expenses more than upset a 15% increase in revenue. However, the company’s quarterly earnings per share, excluding items, came in below analysts’ expectations as did its quarterly revenue.
“Seagate is executing well in an environment where customer demand forecasting is challenging,” said Steve Luczo, Seagate’s chairman, president and chief executive officer. “Looking ahead, we will continue to manage our business conservatively to the demand environment, focus on profitability and effectively invest for market leadership in storage for mobility, cloud and open source. Creating value for shareholders remains a top priority, and in the first half of fiscal 2013, we returned over 95% of operating cash flows through share redemptions and dividends.” Seagate shares are currently losing 1.18% in after hours trading after closing the day’s regular trading session at $37.41, up 16 cents. The shares trade in a 52-week range of $20.50 to $37.94.
Seagate shipped 58.2 million hard drives during the second quarter, representing 43% market share, with enterprise class shipment up 14%, client compute shipment up 20% and non-compute shipments up 5%.
For the second quarter ended December 28, 2012, the Dublin, Ireland-based company reported net income of $492 million or $1.30 per share, compared to $563 million or $1.28 per share for the year-ago quarter.
Excluding items, adjusted net income for the latest quarter was $523 million or $1.38 per share.
On average, 22 analysts polled by Thomson Reuters expected the company to earn $1.28 per share for the second quarter. Analysts’ estimates typically exclude special items.
Gross margin for the quarter narrowed to 27.0% from 31.6% a year earlier. Adjusted gross margin for the latest quarter was 27.6%.
Operating expenses for the quarter rose 8% to $437 million, mainly due to the full quarter of impact for the acquired Samsung HDD business and LaCie, and headcount related expenses.
Revenue for the second quarter rose 15% to $3.67 billion from $3.20 billion in the same quarter last year. Twenty analysts had a consensus revenue estimate of $3.58 billion for the second quarter.
Earlier this month, Seagate said that it it expected to report fiscal second quarter revenue of at least $3.6 billion and gross margin of more than 27%, reflecting unit shipments of about 58 million and maintaining market share. Those preliminary results compared to the company’s previous expectations for revenue of about $3.5 billion and gross margin at the lower end of the Company’s long-term non-GAAP gross margin range of 27% to 32%.
The company’s Board of Directors approved an increase in the company’s quarterly cash dividend to $0.38 per share which was paid on December 28, 2012, rather than in the March 2013 quarter.
During the second quarter, the company returned $1.1 billion to shareholders in dividends and share redemptions.
Rival Western Digital Corp. (WDC) last week reported second quarter profit that more than doubled from last year, as revenue surged amid strong growth in hard-drive shipments. The company’s quarterly earnings per share, excluding items, also topped Wall Street expectations as did its quarterly revenue.
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by RTT Staff Writer
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