Seagate: Preliminary Fiscal 4Q12 Financial Results

Seagate Technology plc announced selected preliminary financial results for its fourth fiscal quarter of 2012, which ended on June 29, 2012.

The company expects to report record revenue of approximately $4.5 billion and non-GAAP gross margin of 33.6%. These preliminary results compare to the Company’s previous expectations for revenue of at least $5 billion and non-GAAP gross margin of at least 34.5%.

Seagate expects to report record unit shipments for the June quarter of approximately 66 million, reflecting approximately 45EB of storage capacity and maintaining approximately 42% market share.

During the quarter the company paid $1.2 billion to redeem over 45 million ordinary shares and exited June with 396 million basic shares outstanding.

Cash, cash equivalents, restricted cash and short term investments totaled $2.2 billion at the end of the June quarter.

"Seagate expects to report another record quarter of revenue in the June quarter, however we did not meet our expected revenue and margin plan," said Steve Luczo, Seagate chairman and chief executive officer.

"The June quarter’s shortfall was due primarily to two factors. First, we did not achieve our planned market share growth as we reduced shipments in response to the industry’s faster than expected recovery from their supply chain disruption. Second, we experienced an isolated supplier quality issue that affected one of our enterprise product lines. This product issue impacted enterprise product unit shipments by approximately 1.5 million units and drove our non-GAAP gross margin below our targeted plan. While this disruption to our business was disappointing, we acted quickly and conservatively by suspending shipments of the affected products. We have resolved the issue and have resumed fulfilling our supply commitments to customers."

Luczo continued: "Based on the macro-economic concerns indicated by a broad base of customers, we are approaching the September quarter conservatively and aligning our business for a relatively flat addressable market and modest improvements in our product mix. We are adjusting our production and inventory planning accordingly, and we expect average selling prices and margins to remain relatively stable in the September quarter. We also continue to expect to exit the calendar year with non-GAAP gross margins exceeding 30%."

Seagate will report full fiscal fourth quarter 2012 financial results on Monday, July 30, 2012 after the close of the market.