Seagate Technology Reports Record Fiscal Fourth Quarter and Year-End 2005 Results
biz.yahoo.com
Tuesday July 19, 4:05 pm ET
- 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
SCOTTS VALLEY, Calif., July 19 /PRNewswire-FirstCall/ -- Seagate Technology (NYSE: STX - News) 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.
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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. |
