Seagate Technology plc (NASDAQ:STX), a world leader in storage
solutions, today announced selected preliminary financial information
for its fiscal fourth quarter of 2015, which ended on July 3, 2015.
Seagate expects to report revenue of approximately $2.9 billion
and non-GAAP gross margin of approximately 27.0% for the fiscal fourth
quarter 2015. These preliminary results compare to the Company’s
previously forecasted range for fiscal fourth quarter of revenue of $3.2
to $3.3 billion and non-GAAP gross margin of approximately 28.5%. The
difference was driven primarily by lower than expected intra-quarter
demand. Non-GAAP operating expenses are expected to be approximately
$530 million, below previously forecasted non-GAAP operating expenses of
approximately $555 million.
Seagate expects to report unit shipments for the fiscal fourth quarter
of approximately 45 million, maintaining approximately 40% market share
and reflecting approximately 52 exabytes. Cash, cash equivalents,
restricted cash and short term investments totaled approximately $2.5
billion at the end of the quarter.
Conference Call Details for Fiscal Fourth Quarter and Year End 2015
Financial Results
Seagate will report its fiscal fourth quarter and year-end
2015 financial results before the market opens on Friday July 31, 2015.
The investment community conference call to discuss these results
will take place that day at 6:00 a.m. Pacific/9:00 a.m. Eastern Time.
The live event can be accessed online at Seagate’s Investor
Relations website at www.seagate.com/investors.
An archived audio webcast of this event will be available
shortly following the event conclusion.
About Seagate
Seagate creates space for the human experience by innovating how data is
stored, shared and used. Learn more at www.seagate.com.
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 the Company’s financial results for the
fiscal quarter ended July 3, 2015. These statements identify prospective
information and may include words such as “expects,” “intends,” “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 cause the Company’s financial results to differ materially from the
expectations described in this Press Release and may pose a risk to the
Company’s operating and financial condition. Such risks and
uncertainties include, but are not limited to: items may be
identified during the Company’s financial statement closing
process that cause adjustments to the estimates included in the Press
Release, 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; 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; currency fluctuations that may impact
our margins and international sales; possible excess industry supply
with respect to particular disk drive products; disruptions to our
supply chain or production capabilities; and fluctuations in interest
rates. 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, 2014, the “Risk Factors” section of which is
incorporated into this Press Release by reference, and other documents
filed with or furnished to the Securities and Exchange Commission. 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.
The inclusion of Seagate’s website address in this press release is
intended to be an inactive textual reference only and not an active
hyperlink. The information contained in, or that can be accessed
through, Seagate’s website and social media channels are not part of
this press release.
Use of Non-GAAP Information
The Company has provided non-GAAP measures of gross margin and
operating expenses, which are adjusted from results based on GAAP to
exclude certain expenses, gains and losses. 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 they are consistent with the financial models and estimates
published by financial analysts who follow the Company.
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For the Three Months Ended July 3, 2015
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Reconciliation of GAAP Gross Margin:
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Preliminary GAAP Gross Margin
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26.3
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%
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Non-GAAP adjustments:
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A
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0.7
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%
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Preliminary non-GAAP Gross Margin
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27.0
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%
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A Gross margin has been adjusted on a non-GAAP basis to exclude
the write off of certain discontinued inventory and the amortization of
intangibles associated with acquisitions and other acquisition related
expenses.
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For the Three Months Ended July 3, 2015
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Reconciliation of Operating Expense:
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Preliminary GAAP Operating Expense
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$
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586
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Non-GAAP adjustments:
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Product Development
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A
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(2
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Marketing and administrative
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B
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(12
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Amortization of intangibles
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C
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(33
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Restructuring and other, net
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D
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(9
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)
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Preliminary non-GAAP Operating Expense
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$
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530
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A Product development expense has been adjusted on a non-GAAP
basis to exclude the impact of integration costs associated with
acquisitions.
B Marketing and administrative expense has been adjusted on a
non-GAAP basis primarily to exclude the write off of certain fixed
assets and the impact of integration costs associated with acquisitions.
C Amortization of intangibles primarily related to our
acquisitions has been excluded on a non-GAAP basis.
D Restructuring and other, net, has been adjusted on a non-GAAP
basis primarily related to a reduction in our work force as a result of
our ongoing focus on cost efficiencies in all areas of our business.
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