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Seagate Technology Reports Record Fiscal Fourth Quarter and Year-End 2005 Results20 July 2005
- Quarterly revenue increases 63% to record $2.18 billion, net income
grows to a record $280 million, and shipments reach record 27.3 million
units
- Annual revenue increases 21% to record $7.55 billion, net income rises
34% to record $707 million, and shipments reach record 98 million units
Seagate - Technology (NYSE: STX) today reported revenue of $2.18 billion, net income of
$280 million, and diluted earnings per share of $0.55 for the quarter ended
July 1, 2005. This compares to revenue of $1.34 billion, a net loss of
$33 million and a loss per share of $0.07 in the year-ago quarter. Seagate
shipped a record 27.3 million disc drives in the quarter, representing a
49% increase from the year-ago quarter.
For the fiscal year ended July 1, 2005, Seagate reported revenue of
$7.55 billion, net income of $707 million and diluted earnings per share of
$1.41. This compares to revenue of $6.22 billion, net income of $529 million
and diluted earnings per share of $1.06 for the fiscal year ended July 2,
2004. Seagate shipped a total of 98 million units during fiscal year 2005, an
increase of 24% over fiscal year 2004.
"With record revenue, record net income, and record unit shipments,
Seagate has just delivered the strongest quarterly performance that the disc
drive industry has ever seen," said Bill Watkins, Seagate Technology president
and CEO. "The considerable growth we are experiencing is evidence of a
significant evolutionary change that is occurring in the disc drive industry
as our products have become a central, enabling technology for global digital
convergence.
"During the fiscal year we saw growth in every major market of our
business. Most notably, in the consumer electronics space -- a market that
independent analysts anticipate will reach $11 billion by 2008 -- we're seeing
the widespread adoption of disc drives in applications that include game
boxes, DVRs, set-top boxes, digital music players, handheld voice recorders,
handheld GPS systems, and imaging systems, with future growth applications to
include digital still and video cameras, PDAs, automotive diagnostic,
navigation and entertainment systems, cell phones, personal media players, and
other converged handheld devices.
"With our broad and growing product portfolio the company is well-
positioned to continue addressing the dynamic set of customers and
applications across the compute and various CE markets, and deliver the strong
financial performance that our shareholders have come to expect."
Consumer Electronics Products
During the June quarter Seagate extended its leadership position in the
consumer electronics (CE) market, the fastest growing market in the disc drive
industry. The company shipped a record 6.2 million drives in the June quarter
for DVR, handheld and gaming applications, an increase of 222% from the
year-ago quarter and an increase of 49% quarter-over-quarter. For the fiscal
year, Seagate shipped 16.7 million disc drives for CE applications, a
165% increase over the 6.3 million the company shipped in fiscal year 2004.
In June, Seagate announced new breakthrough products that will be
available in the coming months for a variety of CE applications, including an
8GB 1-inch drive for handheld devices, a low-cost 2.5-inch drive for DVRs and
game consoles, a rugged 2.5-inch drive for cars and a 1/2 terabyte 3.5-inch
drive for DVRs.
Mobile Computing Products
In the June quarter Seagate's shipments of drives for the mobile computing
space climbed to 2.0 million units, a 342% increase from the year-ago quarter
and a sequential increase of 15%. Seagate shipped a total of 5.7 million units
in fiscal year 2005, up from 3.6 million units in fiscal year 2004. During the
June quarter, Seagate announced two new products that will strengthen the
company's broadening 2.5-inch product portfolio -- Momentus 5400.3, the
industry's first 2.5-inch, 160GB notebook drive utilizing the next-generation
perpendicular recording technology, and Momentus FDE, a notebook drive with
hardware-based encryption technology.
Enterprise Products
Seagate shipped a record 3.7 million units and maintained its leadership
position as industry demand in this space reached record levels. The
3.7 million units represent an increase of 300,000 units sequentially and
1.2 million units or 48% from the year-ago quarter. For the fiscal year,
Seagate shipments grew to a record 13.5 million units, compared to
10.4 million units in fiscal year 2004, an increase of 30%.
Desktop Products
Seagate continued to lead the market with 15.3 million units shipped, up
15% year-over-year. Shipments of the company's high-capacity -- 200GB and
larger -- desktop-class drives grew 37%, sequentially. Total shipments grew to
62.2 million units for fiscal year 2005, up from 59 million units in fiscal
2004. Seagate experienced strong demand for its products throughout the
quarter in all channels and exited the quarter with approximately 4.5 weeks of
distribution channel inventory.
In June, Seagate announced a number of additions to its industry-leading
desktop and personal compute product line. These products include: the
Barracuda 7200.9, a massive 1/2 terabyte, 7200 RPM, 3.5-inch drive for
high-performance PC applications; LD25, a cost-effective, power-efficient
2.5-inch drive for small footprint media PCs; the Seagate External Hard Drive,
a 1/2 terabyte, one-touch back-up external drive; and, the Portable External
Drive, a 120GB, 2.5-inch external drive with Firewire connectivity.
Pricing
The average selling price for all Seagate products, on a blended basis,
increased approximately $1.00 over the March quarter. Price erosion on a "like
for like" product basis during the June quarter was slightly higher than the
March quarter, but lower than historical norms and lower than the company's
expectations entering the quarter.
Business Outlook
Seagate is confident in its extensive and growing product portfolio and
the new revenue opportunities that they will deliver. This, together with the
company's ongoing solid operational execution, favorably positions the company
to continue its strong financial performance in the September quarter and
throughout the remainder of the calendar year. As a result, the company
expects to report substantial year-over-year growth in the September quarter
with revenue and earnings to be comparable to the record levels of revenue and
income from operations reported for the June quarter, excluding costs
associated with expensing stock options. This outlook for the September
quarter would represent an increase of approximately 40% in revenue and 393%
in operating income from the year-ago quarter.
Dividend
The company has declared a quarterly cash distribution of $0.08 per share
to be paid on or before August 19, 2005 to all common shareholders of record
as of August 5, 2005.
Conference Call
Seagate will hold a conference call to review the fiscal fourth quarter
and year-end results at 2:00 p.m. Pacific Time today. The conference call can
be accessed online at or by telephone as follows:
USA: 877-223-6202
International: 706-679-3742
Replay
A replay will be available beginning July 19 at 5 p.m. Pacific Time
through July 26 at 8:59 p.m. Pacific Time. The replay can be accessed from
or by telephone as follows:
USA: 800-642-1687
International: 706-645-9291
Access code: 7599756
For more information please visit:
About Seagate
Seagate is the worldwide leader in the design, manufacturing and marketing
of hard disc drives, providing products for a wide-range of Enterprise,
Desktop, Mobile Computing, and Consumer Electronics applications. Seagate's
business model leverages technology leadership and world-class manufacturing
to deliver industry-leading innovation and quality to its global customers,
and to be the low cost producer in all markets in which it participates. The
company is committed to providing award-winning products, customer support and
reliability to meet the world's growing demand for information storage.
Seagate can be found around the globe and at
Safe Harbor
This press release contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. These forward-looking
statements include, but are not limited to, statements related to future
financial performance, price and product competition, customer demand for our
products, and general market conditions. These forward-looking statements are
based on information available to Seagate as of the date of this release and
current expectations, forecasts and assumptions and involve a number of risks
and uncertainties that could cause actual results to differ materially from
those anticipated by these forward-looking statements. Such risks and
uncertainties include a variety of factors, some of which are beyond the
company's control. In particular, such risks and uncertainties include the
variable demand and the aggressive pricing environment for disc drives;
dependence on the company's ability to successfully manufacture in increasing
volumes on a cost-effective basis and with acceptable quality its current disc
drive products; and the adverse impact of competitive product announcements
and possible excess industry supply with respect to particular disc drive
products. Information concerning additional factors that could cause results
to differ materially from those projected in the forward-looking statements is
contained in the company's Annual Report on Form 10-K/A as filed with the
U.S. Securities and Exchange Commission on September 3, 2004 and in the
company's Quarterly Report on Form 10-Q as filed with the U.S. Securities and
Exchange Commission on April 29, 2005. These forward-looking statements should
not be relied upon as representing the company's views as of any subsequent
date and Seagate undertakes no obligation to update forward-looking statements
to reflect events or circumstances after the date they were made.
>
/Web site: /
For further information: Brian Ziel, Media Relations, +1-831-439-5429,
or brian.ziel@seagate.com, or Rod Cooper, Investor Relations,
+1-831-439-2371, or rod.j.cooper@seagate.com, both of Seagate Technology
LLC
Source: NewsWire
All trademarks and copyrighted information contained herein are the property of their respective owners.
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