Summary
Seagate Technology Holdings plc reported revenue of $2.7 billion for the fiscal quarter ended March 31, 2017, a slight decrease from the prior quarter driven by seasonality and price erosion, but an increase compared to the same period last year, primarily due to an improved product mix and increased exabytes shipped. The company demonstrated strong operational cash flow of $426 million during the quarter. Gross margin remained stable at 31% sequentially but significantly improved year-over-year (to 20% in March 2016) due to favorable product mix and cost savings from workforce reductions and manufacturing consolidation. Financially, Seagate successfully issued $1.25 billion in senior notes and used $97 million to repurchase outstanding debt. The company also returned capital to shareholders through $186 million in dividends and significant share repurchases, with $1.5 billion still available under its authorization. The balance sheet reflects a substantial increase in cash and cash equivalents to $3.0 billion, driven by operating cash flow and new debt issuance. Management expects continued sufficiency of cash to meet obligations for the next 12 months.
Financial Highlights
54 data points| Revenue | $2.67B |
| Cost of Revenue | $1.86B |
| Gross Profit | $816.00M |
| R&D Expenses | $324.00M |
| SG&A Expenses | $150.00M |
| Operating Expenses | $2.41B |
| Operating Income | $266.00M |
| Interest Expense | $60.00M |
| Net Income | $194.00M |
| EPS (Basic) | $0.66 |
| EPS (Diluted) | $0.65 |
| Shares Outstanding (Basic) | 296.00M |
| Shares Outstanding (Diluted) | 300.00M |
Key Highlights
- 1Revenue for the March 2017 quarter was $2.7 billion, a decrease from the previous quarter but an increase year-over-year, driven by improved product mix and higher exabytes shipped.
- 2Gross margin remained strong at 31% sequentially and improved substantially from 20% in the prior year's quarter, attributed to favorable product mix and cost-saving initiatives.
- 3Operating cash flow was robust at $426 million for the quarter.
- 4The company issued $1.25 billion in new senior notes (4.25% due 2022 and 4.875% due 2024) and used a portion of cash for debt repurchases.
- 5Total cash and cash equivalents increased significantly to $3.0 billion as of March 31, 2017, up from $1.1 billion at the start of the fiscal year.
- 6The company paid $186 million in dividends and continued its share repurchase program, with $1.5 billion remaining authorization.
- 7Restructuring charges of $48 million were incurred in the quarter related to workforce reductions and manufacturing consolidation.