Summary
Seagate Technology Holdings plc (STX) reported a net income of $25 million for the third quarter of fiscal year 2024, a significant improvement from a net loss of $433 million in the same quarter last year. Revenue for the quarter was $1.655 billion, a decrease from $1.860 billion in the prior year's comparable quarter, but showed a sequential increase from $1.555 billion in the second quarter of fiscal year 2024. The company highlighted an ongoing recovery in the cloud market and noted that customer inventory adjustments appear largely complete, suggesting an early stage of industry-wide demand recovery. Gross margin improved to 26% from 17% year-over-year, driven by favorable pricing actions and a decrease in depreciation expense due to extended useful lives of manufacturing equipment. The company ended the quarter with $795 million in cash and cash equivalents. Despite revenue decline year-over-year, the improved profitability and sequential revenue growth are positive indicators for investors. Seagate also announced a significant subsequent event: the sale of certain System-on-Chip (SoC) products, equipment, and related assets for $600 million to Avago Technologies, which is expected to further bolster its financial position.
Financial Highlights
54 data points| Revenue | $1.66B |
| Cost of Revenue | $1.23B |
| Gross Profit | $425.00M |
| R&D Expenses | $164.00M |
| SG&A Expenses | $116.00M |
| Operating Expenses | $1.51B |
| Operating Income | $143.00M |
| Interest Expense | $82.00M |
| Net Income | $25.00M |
| EPS (Basic) | $0.12 |
| EPS (Diluted) | $0.12 |
| Shares Outstanding (Basic) | 210.00M |
| Shares Outstanding (Diluted) | 213.00M |
Key Highlights
- 1Net income turned positive at $25 million for the quarter, compared to a net loss of $433 million in the prior year's Q3.
- 2Revenue of $1.655 billion decreased year-over-year but increased sequentially from $1.555 billion in Q2 FY2024.
- 3Gross margin improved significantly to 26% from 17% in Q3 FY2023, driven by pricing actions and cost efficiencies.
- 4The company reported positive operating cash flow of $188 million for the quarter and $484 million year-to-date.
- 5A significant subsequent event is the sale of SoC assets for $600 million, announced after the quarter end.
- 6Customer inventory adjustments appear mostly complete, indicating potential for demand recovery in the cloud market.
- 7The company continued to pay a quarterly dividend of $0.70 per share.