Summary
Seagate Technology Holdings plc (STX) reported revenue of $2.731 billion for the third quarter of fiscal year 2021, a slight increase of $13 million compared to the same period last year. While revenue was relatively flat year-over-year, the company saw a shift in its revenue mix, with growth in mass capacity storage exabytes shipped offsetting a decline in legacy markets. For the nine-month period, revenue decreased by $324 million year-over-year, attributed to price erosion, reduced legacy market shipments, and the impact of the COVID-19 pandemic. The company maintained a gross margin of 27% for both the quarter and the nine-month period, indicating stable profitability despite revenue pressures. Net income for the quarter was $329 million, a slight increase from $320 million in the prior year's comparable quarter, with diluted EPS at $1.39. The balance sheet shows a decrease in cash and cash equivalents, largely due to significant share repurchases and dividend payments totaling $2.314 billion for the nine-month period, alongside capital expenditures of $374 million. Despite these outflows, Seagate maintains a strong liquidity position with approximately $1.2 billion in cash and cash equivalents and $1.725 billion available under its revolving credit facility, while remaining compliant with its debt covenants.
Key Highlights
- 1Revenue for the third quarter of FY21 was $2.731 billion, a modest increase of $13 million year-over-year, driven by increased mass capacity storage exabytes shipped.
- 2Gross margin remained stable at 27% for the quarter and the nine-month period, indicating consistent profitability.
- 3Net income for the quarter was $329 million, with diluted EPS of $1.39, showing a slight improvement from the prior year's quarter.
- 4The company repurchased approximately $1.819 billion of its ordinary shares and paid $495 million in dividends during the first nine months of FY21.
- 5Cash and cash equivalents decreased by $510 million from July 3, 2020, to April 2, 2021, primarily due to substantial capital returns to shareholders and capital expenditures.
- 6Seagate maintained compliance with its debt covenants and has $1.725 billion available under its revolving credit facility, ensuring adequate liquidity.
- 7Product development expenses decreased by $19 million year-over-year for the quarter, partly due to headcount reductions from the June 2020 restructuring plan.