Seagate Technology (STX) Prelim. Q1 Revenue Outpaces Expectations
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Seagate Technology plc (Nasdaq: STX) announced selected preliminary financial information for its fiscal first quarter 2017, which ended on September 30, 2016. Seagate expects to report revenue of approximately $2.8 billion, and GAAP and non-GAAP gross margin of approximately 29%. The Company expects to report HDD exabyte shipments of approximately 67 exabytes, reflecting unit shipments of approximately 39 million and average capacity per drive of 1.7 terabytes.
*** NOTE: The Street sees Q1 revenue of $2.74 billion and EPS of $0.79.
These preliminary results compare to the Company’s previous forecast for fiscal first quarter 2017 revenue of at least $2.7 billion and non-GAAP gross margin of at least 27%. The strength in the Company’s revenue and gross margin for the quarter was driven primarily by better than expected demand for the Company’s high capacity enterprise HDD product portfolio. Previously announced cost containment measures and restructuring actions continue to progress as planned. GAAP and Non-GAAP operating expenses for the September quarter are expected to be approximately $580 million and $470 million respectively, increasing sequentially from the June quarter primarily due to higher variable compensation related to better financial performance. The Company ended the quarter with approximately $1.5 billion in cash and cash equivalents.
“This quarter we returned to our long-term targeted margin profitability and operating income ranges and generated significant cash flow from operations,” said Steve Luczo, chairman and chief executive officer. “Our strong results reflect persistent growth and demand for cloud-based storage exabyte capacity and our new high capacity HDD products are gaining traction in the marketplace. At the same time, we are refreshing our full HDD product portfolio with cost optimized products and our organization continues to execute our company-wide restructuring and cost containment activities.
“With the ever-growing demand for HDD storage capacity and our focus on providing the most comprehensive product portfolio with leading technology, Seagate should continue to deliver solid financial performance and strong shareholder return for the years to come.”
Conference Call Details for Fiscal First Quarter 2017 Financial Results
Seagate will report its fiscal first quarter 2017 financial results before the market opens on Wednesday, October 19, 2016. 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.
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