Seagate: 2Q08 Financial Results

Seagate Technology
reported disc drive unit shipments of approximately 50 million, revenue
of $3.4 billion, GAAP net income of $403 million, and diluted net
income per share of $0.73 for the quarter ended December 28, 2007. GAAP
net income and diluted net income per share includes approximately $31
million of purchased intangibles amortization and other charges
associated with the Maxtor, EVault and MetaLINCS acquisitions and also
a net gain from asset sales of approximately $15 million. Excluding
these items, non-GAAP net income and diluted net income per share were
$419 million and $0.76. Included in both GAAP and non-GAAP results are
restructuring charges of approximately $27 million or approximately
$0.05 per share.

For the six months ended December 28, 2007 Seagate
reported revenue of $6.7 billion, GAAP net income of $758 million, and
diluted net income per share of $1.37. GAAP net income and diluted net
income per share includes approximately $61 million of purchased
intangibles amortization and other charges associated with the Maxtor,
EVault and MetaLINCs acquisitions and also a net gain from asset sales
of approximately $15 million. Excluding these items, non-GAAP net
income and diluted net income per share were $804 million and $1.45.
Included in both GAAP and non-GAAP results are restructuring charges of
approximately $32 million or approximately $0.06 per share.

“Seagate’s
strong financial performance in the quarter reflects the company’s
solid business model and expanded product portfolio, which positioned
us well in a favorable industry environment characterized by seasonal
strength across all storage markets and continued growth in global
demand,” said Bill Watkins, Seagate chief executive officer. “During
the quarter, Seagate achieved record shipments and experienced some
capacity constraints, underscoring the phenomenal growth of digital
content in both the consumer and commercial markets. Based on unit
demand across all categories, we entered the March quarter in a
position of strength. The storage industry remains one of the world’s
most important and exciting industries. We are confident Seagate’s
vision, technology, and operational excellence will drive us to
continued strong financial and operating performance in the March
quarter and double-digit year-over-year growth.”

Business Outlook
For the March quarter, Seagate expects to report revenue of $3.2 – $3.3
billion, and GAAP diluted net income per share of $0.57 – $0.61. 
Excluding approximately $27 million of purchased intangibles
amortization and other charges associated with past closed
acquisitions, including MetaLINCS, non-GAAP diluted net income per
share for the March quarter is expected to fall within the range of
$0.62 – $0.66. At the mid-point, this guidance represents a 15% revenue
increase year-over-year and a 36% non-GAAP diluted earnings per share
increase year-over-year.

Seagate Technology