Seagate
Technology reported results for the quarter ended July 3,
2009 of 40.6 million disk drive unit shipments, revenue of $2.35 billion, a
net loss of $81 million and net loss per share of $0.16. The financial results
for the quarter include $21 million of purchased intangibles amortization and
other charges associated with acquisitions, and $85 million of restructuring
and related accelerated depreciation charges. The aggregate impact of these
items is $106 million or approximately $0.22 per share.
“The overall organizational, operational, technical and product progress
we have made during the last six months is reflected in our financial results
for the June quarter and demonstrates meaningful progress toward the goal of
returning to sustained GAAP profitability as soon as possible,” said Steve
Luczo, Seagate CEO. “We are also seeing signs that the storage markets are
improving and are providing better visibility into the demand environment. Our
approach to the September quarter with respect to our production volumes and
product mix is to continue to manage our factories with an intense focus on
maximizing our return on invested capital while satisfying our customers’
requirements.”
For the fiscal year ended July 3, 2009, the company reported disk drive
unit shipments of 163.8 million, revenue of $9.8 billion, a net loss of $3.1
billion, and net loss per share of $6.32. The financial results for the fiscal
year include $77 million of purchased intangibles amortization and other
charges associated with acquisitions, charges related to restructuring
activities of $266 million, a charge of $271 million that reflects an
unfavorable adjustment to the valuation allowance related to the company’s
deferred tax assets and a $2.3 billion charge relating to the write-off of
goodwill and other long-lived assets. The aggregate impact of these items is a
$2.9 billion reduction in earnings, or a decrease of approximately $5.95 per
share. Of the $266 million in restructuring related charges, $56 million was
for accelerated depreciation charges, with $30 million recorded in cost of
revenue and $26 million in product development expense. The majority of the
remaining balance of the restructuring charges relate to global headcount
reductions.
Business Outlook
While there are signs of improved visibility, the ongoing uncertainty in
global economic conditions makes it difficult to predict product demand and
other related matters, which makes it more likely that Seagate’s actual
results could differ materially from current expectations.
For the September quarter, the company is planning for the overall
industry demand for disk drives to be 135-140 million units. Consequently, the
company expects revenue to be approximately $2.4
– $2.6 billion and gross
margin as a percent of revenue to improve by 200-350 basis points as compared
to the June quarter. Product development and marketing/administrative costs
are expected to decrease to approximately $315 million while other income and
expense is expected to be a charge of approximately $40 million.
