Click here to close now.


Microsoft Cloud Authors: Jayaram Krishnaswamy, Elizabeth White, Andreas Grabner, Jim Kaskade, Pat Romanski

News Feed Item

Seagate Technology Reports Fiscal Second Quarter 2014 Financial Results

Seagate Technology plc (NASDAQ: STX) (the “Company” or “Seagate”) today reported financial results for the second quarter of fiscal year 2014 ended December 27, 2013. During the second quarter, the Company reported revenue of $3.53 billion, gross margin of 28.0%, net income of $428 million and diluted earnings per share of $1.24. On a non-GAAP basis, which excludes the net impact of certain items, Seagate reported gross margin of 28.5%, net income of $455 million and diluted earnings per share of $1.32.

During the second quarter, the Company generated approximately $856 million in operating cash flow, paid cash dividends of $142 million and repurchased 33 million ordinary shares for approximately $1.5 billion. There were 328 million ordinary shares issued and outstanding as of the end of the quarter. Cash, cash equivalents, restricted cash, and short-term investments totaled approximately $2.3 billion at the end of the quarter.

“Seagate’s results in the December quarter reflect discipline in managing the profitability of our business and strong operational execution. We continue to strategically invest in our product portfolio and enhance our vertically integrated manufacturing capabilities to effectively capitalize on the cloud, mobile and open source storage trends that are being fueled by data growth,” said Steve Luczo, Seagate’s chairman and chief executive officer. “Our cash flow was very strong this quarter, and combined with the execution of our capital allocation strategy, we are on track to meet our goal of returning 70% of our operating cash flow to shareholders this fiscal year.”

For a detailed reconciliation of GAAP to non-GAAP results, see accompanying financial tables.

Seagate has issued a Supplemental Commentary document. The Supplemental Commentary will not be read during today's call, but is available on Seagate’s Investors website at

Quarterly Cash Dividend

The Board of Directors has approved a quarterly cash dividend of $0.43 per share, which will be payable on February 24, 2014 to shareholders of record as of the close of business on February 10, 2014. The payment of any future quarterly dividends will be at the discretion of the Board and will be dependent upon Seagate's financial position, results of operations, available cash, cash flow, capital requirements and other factors deemed relevant by the Board.

Investor Communications

Seagate management will hold a public webcast today at 2:00 p.m. Pacific Time that can be accessed on its Investors website at During today's webcast, the Company will provide an outlook for its third fiscal quarter of 2014, including key underlying assumptions.


A replay will be available beginning today at approximately 6:00 p.m. Pacific Time at

About Seagate

Seagate is a world leader in hard disk drives and storage solutions. Learn more at

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, each as amended, including, in particular, statements about our plans, strategies and prospects and estimates of industry growth for the fiscal quarter ending March 28, 2014 and beyond. These statements identify prospective information and include words such as “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “projects” and similar expressions. These forward-looking statements are based on information available to the Company as of the date of this press release and are based on management’s current views and assumptions. These forward-looking statements are conditioned upon and also involve a number of known and unknown risks, uncertainties, and other factors that could cause actual results, performance or events to differ materially from those anticipated by these forward-looking statements. Such risks, uncertainties, and other factors may be beyond the Company’s control and may pose a risk to the Company’s operating and financial condition. Such risks and uncertainties include, but are not limited to: the uncertainty in global economic conditions, as consumers and businesses may defer purchases in response to tighter credit and financial news; the impact of the variable demand and adverse pricing environment for disk drives, particularly in view of current business and economic conditions; dependence on the Company’s ability to successfully qualify, manufacture and sell its disk drive products in increasing volumes on a cost-effective basis and with acceptable quality, particularly the new disk drive products with lower cost structures; the impact of competitive product announcements; possible excess industry supply with respect to particular disk drive products; and the Company’s ability to achieve projected cost savings in connection with restructuring plans. Information concerning risks, uncertainties and other factors that could cause results to differ materially from the expectations described in this press release is contained in the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission on August 7, 2013 and the Quarterly Report on Form 10-Q filed with the U.S. Securities and Exchange Commission on October 29, 2013, the “Risk Factors” sections of which are incorporated into this press release by reference. These forward-looking statements should not be relied upon as representing the Company’s views as of any subsequent date and the Company undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date they were made.



(In millions)



December 27,

June 28,

Current assets:
Cash and cash equivalents $ 2,293 $ 1,708
Short-term investments 46 480
Restricted cash and investments 4 101
Accounts receivable, net 1,615 1,670
Inventories 948 854
Deferred income taxes 116 115
Other current assets 267   484
Total current assets 5,289 5,412
Property, equipment and leasehold improvements, net 2,128 2,269
Goodwill 477 476
Other intangible assets, net 329 405
Deferred income taxes 465 456
Other assets, net 202   225
Total Assets $ 8,890   $ 9,243
Current liabilities:
Accounts payable $ 1,577 $ 1,690
Accrued employee compensation 267 335
Accrued warranty 158 176
Accrued expenses 455 407
Current portion of long-term debt   3
Total current liabilities 2,457 2,611
Long-term accrued warranty 141 144
Long-term accrued income taxes 103 87
Other non-current liabilities 122 121
Long-term debt, less current portion 3,572   2,774
Total Liabilities 6,395 5,737
Total Equity 2,495   3,506
Total Liabilities and Equity $ 8,890   $ 9,243

The information as of June 28, 2013 was derived from the Company’s audited Consolidated Balance Sheet as of June 28, 2013.



(In millions, except per share data)


For the Three Months Ended For the Six Months Ended

December 27,


December 28,

December 27,


December 28,

Revenue $ 3,528 $ 3,668 $ 7,017 $ 7,400
Cost of revenue 2,541 2,676 5,055 5,347
Product development 312 277 606 545
Marketing and administrative 190 139 371 289
Amortization of intangibles 25 20 45 39
Restructuring and other, net 16   1   18   1  
Total operating expenses 3,084   3,113   6,095   6,221  
Income from operations 444 555 922 1,179
Interest income 1 2 6 4
Interest expense (49 ) (55 ) (93 ) (111 )
Other, net 46   (3 ) 47   27  
Other expense, net (2 ) (56 ) (40 ) (80 )
Income before income taxes 442 499 882 1,099
Provision for income taxes 14   7   27   25  
Net income 428 492 855 1,074
Less: Net income attributable to noncontrolling interest        
Net income attributable to Seagate Technology plc $ 428   $ 492   $ 855   $ 1,074  
Net income per share attributable to Seagate Technology plc ordinary shareholders:
Basic $ 1.27 $ 1.33 $ 2.46 $ 2.81
Diluted 1.24 1.30 2.39 2.73
Number of shares used in per share calculations:
Basic 336 369 347 382
Diluted 346 379 357 394
Cash dividends declared per Seagate Technology plc ordinary share $ 0.43 $ 0.70 $ 0.81 $ 1.02



(In millions)


For the Six Months Ended

December 27,


December 28,

Net income $ 855 $ 1,074
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 457 430
Share-based compensation 57 36
Deferred income taxes (15 ) (11 )
Gain on sale of investments (32 ) (33 )
Gain on sale of property and equipment (4 ) (8 )
Loss on redemption and repurchase of debt 6
Other non-cash operating activities, net 8 5
Changes in operating assets and liabilities:
Restricted cash 104
Accounts receivable, net 51 683
Inventories (94 ) 156
Accounts payable (46 ) (496 )
Accrued employee compensation (68 ) (62 )
Accrued expenses, income taxes and warranty 41 (97 )
Vendor non-trade receivables 199 305
Other assets and liabilities 25   (12 )
Net cash provided by operating activities 1,538   1,976  
Acquisition of property, equipment and leasehold improvements (304 ) (427 )
Proceeds from the sale of property and equipment 4
Proceeds from the sale of strategic investments 72 42
Purchases of short-term investments (87 ) (168 )
Sales of short-term investments 463 125
Maturities of short-term investments 61 21
Cash used in acquisition of LaCie S.A., net of cash acquired (36 )
Other investing activities, net (28 ) (14 )
Net cash provided by (used in) investing activities 177   (453 )
Repayments of long-term debt and capital lease obligations (58 )
Net proceeds from issuance of 3.75% Senior Notes 791
Repurchases of ordinary shares (1,702 ) (1,510 )
Dividends to shareholders (277 ) (377 )
Proceeds from issuance of ordinary shares under employee stock plans 61 168
Escrow deposit for acquisition of noncontrolling shares of LaCie S.A. (72 )
Other financing activities, net (5 )  
Net cash used in financing activities (1,132 ) (1,849 )
Effect of foreign currency exchange rate changes on cash and cash equivalents 2   2  
Increase (decrease) in cash and cash equivalents 585 (324 )
Cash and cash equivalents at the beginning of the period 1,708   1,707  
Cash and cash equivalents at the end of the period $ 2,293   $ 1,383  

Use of non-GAAP financial information

To supplement the condensed consolidated financial statements presented in accordance with generally accepted accounting principles (GAAP), the Company provides non-GAAP measures of net income, diluted net income per share and gross margin as a percentage of revenue, which are adjusted from results based on GAAP to exclude certain expenses, gains and losses. These non-GAAP financial measures are provided to enhance the user's overall understanding of the Company’s current financial performance and our prospects for the future. Specifically, the Company believes non-GAAP results provide useful information to both management and investors as these non-GAAP results exclude certain expenses, gains and losses that we believe are not indicative of our core operating results and because it is consistent with the financial models and estimates published by financial analysts who follow the Company.

These non-GAAP results are some of the primary measurements management uses to assess the Company’s performance, allocate resources and plan for future periods. Reported non-GAAP results should only be considered as supplemental to results prepared in accordance with GAAP, and not considered as a substitute for, or superior to, GAAP results. These non-GAAP measures may differ from the non-GAAP measures reported by other companies in our industry.



(In millions, except per share amounts)



For the Three
Months Ended
December 27, 2013

For the Six Months
Ended December 27,


GAAP net income $ 428 $ 855
Non-GAAP adjustments:
Cost of revenue A 17 37
Product development B 3 6
Marketing and administrative B 3 6
Amortization of intangibles C 25 45
Restructuring and other, net D 16 18
Other expense, net E (31 ) (33 )
Benefit from income taxes F (6 ) (6 )
Non-GAAP net income $ 455   $ 928  
Diluted net income per share:
GAAP $ 1.24 $ 2.39
Non-GAAP $ 1.32 $ 2.60
Shares used in diluted net income per share calculation 346 357


  For the three and six months ended December 27, 2013, Cost of revenue on a GAAP basis totaled $2,541 million and $5,055 million, respectively, while non-GAAP Cost of revenue, which excludes the net impact of certain adjustments, was $2,524 million and $5,018 million, respectively. The non-GAAP adjustments include amortization of intangibles and other acquisition related expenses associated with the December 2011 acquisition of Samsung Electronics Co., Ltd's hard disk drive business (the "Samsung HDD business") and the August 2012 acquisition of LaCie S.A. ("LaCie").


For the three and six months ended December 27, 2013, Product development and Marketing and administrative expenses have been adjusted on a non-GAAP basis to exclude the impact of acquisition and integration costs associated with the Samsung HDD business and LaCie.


For the three and six months ended December 27, 2013, Amortization of intangibles related to our Samsung HDD business and LaCie acquisitions.


For the three and six months ended December 27, 2013, Restructuring and other, net, includes a restructuring charge recorded during the December 2013 quarter associated with a reduction in the work force.


For the three and six months ended December 27, 2013, Other expense, net, has been adjusted on a non-GAAP basis primarily to exclude the impact of a gain recognized upon the sale of certain strategic investments.


For the three and six months ended December 27, 2013, Benefit from income taxes has been adjusted on a non-GAAP basis primarily to exclude the impact related to the release of valuation allowance on U.S. deferred tax assets associated with increases in the Company's forecasted U.S. taxable income.

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@ThingsExpo Stories
SYS-CON Events announced today that IBM Cloud Data Services has been named “Bronze Sponsor” of SYS-CON's 17th Cloud Expo, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. IBM Cloud Data Services offers a portfolio of integrated, best-of-breed cloud data services for developers focused on mobile computing and analytics use cases.
In his session at @ThingsExpo, Tony Shan, Chief Architect at CTS, will explore the synergy of Big Data and IoT. First he will take a closer look at the Internet of Things and Big Data individually, in terms of what, which, why, where, when, who, how and how much. Then he will explore the relationship between IoT and Big Data. Specifically, he will drill down to how the 4Vs aspects intersect with IoT: Volume, Variety, Velocity and Value. In turn, Tony will analyze how the key components of IoT influence Big Data: Device, Connectivity, Context, and Intelligence. He will dive deep to the matrix...
When it comes to IoT in the enterprise, namely the commercial building and hospitality markets, a benefit not getting the attention it deserves is energy efficiency, and IoT’s direct impact on a cleaner, greener environment when installed in smart buildings. Until now clean technology was offered piecemeal and led with point solutions that require significant systems integration to orchestrate and deploy. There didn't exist a 'top down' approach that can manage and monitor the way a Smart Building actually breathes - immediately flagging overheating in a closet or over cooling in unoccupied ho...
Scott Guthrie's keynote presentation "Journey to the intelligent cloud" is a must view video. This is from AzureCon 2015, September 29, 2015 I have reproduced some screen shots in case you are unable to view this long video for one reason or another. One of the highlights is 3 datacenters coming on line in India.
SYS-CON Events announced today that ProfitBricks, the provider of painless cloud infrastructure, will exhibit at SYS-CON's 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. ProfitBricks is the IaaS provider that offers a painless cloud experience for all IT users, with no learning curve. ProfitBricks boasts flexible cloud servers and networking, an integrated Data Center Designer tool for visual control over the cloud and the best price/performance value available. ProfitBricks was named one of the coolest Clo...
“The Internet of Things transforms the way organizations leverage machine data and gain insights from it,” noted Splunk’s CTO Snehal Antani, as Splunk announced accelerated momentum in Industrial Data and the IoT. The trend is driven by Splunk’s continued investment in its products and partner ecosystem as well as the creativity of customers and the flexibility to deploy Splunk IoT solutions as software, cloud services or in a hybrid environment. Customers are using Splunk® solutions to collect and correlate data from control systems, sensors, mobile devices and IT systems for a variety of Ind...
You have your devices and your data, but what about the rest of your Internet of Things story? Two popular classes of technologies that nicely handle the Big Data analytics for Internet of Things are Apache Hadoop and NoSQL. Hadoop is designed for parallelizing analytical work across many servers and is ideal for the massive data volumes you create with IoT devices. NoSQL databases such as Apache HBase are ideal for storing and retrieving IoT data as “time series data.”
Clearly the way forward is to move to cloud be it bare metal, VMs or containers. One aspect of the current public clouds that is slowing this cloud migration is cloud lock-in. Every cloud vendor is trying to make it very difficult to move out once a customer has chosen their cloud. In his session at 17th Cloud Expo, Naveen Nimmu, CEO of Clouber, Inc., will advocate that making the inter-cloud migration as simple as changing airlines would help the entire industry to quickly adopt the cloud without worrying about any lock-in fears. In fact by having standard APIs for IaaS would help PaaS expl...
Organizations already struggle with the simple collection of data resulting from the proliferation of IoT, lacking the right infrastructure to manage it. They can't only rely on the cloud to collect and utilize this data because many applications still require dedicated infrastructure for security, redundancy, performance, etc. In his session at 17th Cloud Expo, Emil Sayegh, CEO of Codero Hosting, will discuss how in order to resolve the inherent issues, companies need to combine dedicated and cloud solutions through hybrid hosting – a sustainable solution for the data required to manage I...
Mobile messaging has been a popular communication channel for more than 20 years. Finnish engineer Matti Makkonen invented the idea for SMS (Short Message Service) in 1984, making his vision a reality on December 3, 1992 by sending the first message ("Happy Christmas") from a PC to a cell phone. Since then, the technology has evolved immensely, from both a technology standpoint, and in our everyday uses for it. Originally used for person-to-person (P2P) communication, i.e., Sally sends a text message to Betty – mobile messaging now offers tremendous value to businesses for customer and empl...
Apps and devices shouldn't stop working when there's limited or no network connectivity. Learn how to bring data stored in a cloud database to the edge of the network (and back again) whenever an Internet connection is available. In his session at 17th Cloud Expo, Bradley Holt, Developer Advocate at IBM Cloud Data Services, will demonstrate techniques for replicating cloud databases with devices in order to build offline-first mobile or Internet of Things (IoT) apps that can provide a better, faster user experience, both offline and online. The focus of this talk will be on IBM Cloudant, Apa...
As more and more data is generated from a variety of connected devices, the need to get insights from this data and predict future behavior and trends is increasingly essential for businesses. Real-time stream processing is needed in a variety of different industries such as Manufacturing, Oil and Gas, Automobile, Finance, Online Retail, Smart Grids, and Healthcare. Azure Stream Analytics is a fully managed distributed stream computation service that provides low latency, scalable processing of streaming data in the cloud with an enterprise grade SLA. It features built-in integration with Azur...
SYS-CON Events announced today that HPM Networks will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. For 20 years, HPM Networks has been integrating technology solutions that solve complex business challenges. HPM Networks has designed solutions for both SMB and enterprise customers throughout the San Francisco Bay Area.
The enterprise is being consumerized, and the consumer is being enterprised. Moore's Law does not matter anymore, the future belongs to business virtualization powered by invisible service architecture, powered by hyperscale and hyperconvergence, and facilitated by vertical streaming and horizontal scaling and consolidation. Both buyers and sellers want instant results, and from paperwork to paperless to mindless is the ultimate goal for any seamless transaction. The sweetest sweet spot in innovation is automation. The most painful pain point for any business is the mismatch between supplies a...
The broad selection of hardware, the rapid evolution of operating systems and the time-to-market for mobile apps has been so rapid that new challenges for developers and engineers arise every day. Security, testing, hosting, and other metrics have to be considered through the process. In his session at Big Data Expo, Walter Maguire, Chief Field Technologist, HP Big Data Group, at Hewlett-Packard, will discuss the challenges faced by developers and a composite Big Data applications builder, focusing on how to help solve the problems that developers are continuously battling.
As enterprises capture more and more data of all types – structured, semi-structured, and unstructured – data discovery requirements for business intelligence (BI), Big Data, and predictive analytics initiatives grow more complex. A company’s ability to become data-driven and compete on analytics depends on the speed with which it can provision their analytics applications with all relevant information. The task of finding data has traditionally resided with IT, but now organizations increasingly turn towards data source discovery tools to find the right data, in context, for business users, d...
SYS-CON Events announced today that MobiDev, a software development company, will exhibit at the 17th International Cloud Expo®, which will take place November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. MobiDev is a software development company with representative offices in Atlanta (US), Sheffield (UK) and Würzburg (Germany); and development centers in Ukraine. Since 2009 it has grown from a small group of passionate engineers and business managers to a full-scale mobile software company with over 150 developers, designers, quality assurance engineers, project manage...
Learn how IoT, cloud, social networks and last but not least, humans, can be integrated into a seamless integration of cooperative organisms both cybernetic and biological. This has been enabled by recent advances in IoT device capabilities, messaging frameworks, presence and collaboration services, where devices can share information and make independent and human assisted decisions based upon social status from other entities. In his session at @ThingsExpo, Michael Heydt, founder of Seamless Thingies, will discuss and demonstrate how devices and humans can be integrated from a simple clust...
SYS-CON Events announced today that Cloud Raxak has been named “Media & Session Sponsor” of SYS-CON's 17th Cloud Expo, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Raxak Protect automates security compliance across private and public clouds. Using the SaaS tool or managed service, developers can deploy cloud apps quickly, cost-effectively, and without error.
Who are you? How do you introduce yourself? Do you use a name, or do you greet a friend by the last four digits of his social security number? Assuming you don’t, why are we content to associate our identity with 10 random digits assigned by our phone company? Identity is an issue that affects everyone, but as individuals we don’t spend a lot of time thinking about it. In his session at @ThingsExpo, Ben Klang, Founder & President of Mojo Lingo, will discuss the impact of technology on identity. Should we federate, or not? How should identity be secured? Who owns the identity? How is identity ...