Seagate Technology's strategic investments pay off

Storage

by Duncan MacRae| 23 July 2014

The firm reveals its latest financial results amidst an increasingly disrupted storage industry.

Storage specialist Seagate Technology has reported impressive financial results for the quarter and fiscal year ended June 27, 2014.

For the fourth quarter, the company reported revenue of approximately $3.3bn, gross margin of 28.0%, net income of $320m and diluted earnings per share of $0.95. On a non-GAAP basis, which excludes the net impact of certain items, Seagate reported gross margin of 28.5%, net income of $370m and diluted earnings per share of $1.10.

During the fourth quarter, Seagate Technology generated approximately $577m in operating cash flow and returned $166m to shareholders in the form of dividends and share redemptions.

For the fiscal year ended June 27, 2014, the company reported revenue of $13.7bn, gross margin of 28.0%, net income of $1.6bn and diluted earnings per share of $4.52. On a non-GAAP basis, Seagate reported gross margin of 28.5%, net income of $1.8bn and diluted earnings per share of $5.04.

Steve Luczo, Seagate's chairman and CEO, said: "Throughout fiscal year 2014, Seagate delivered strong financial and operational performance and returned significant value to shareholders. We made strategic investments in our technology portfolio, which enabled us to continue to innovate into higher capacity and power efficient storage solutions, and expanding our capabilities to serve a broader storage customer base in the future through new cloud systems and solutions and flash technology for connected storage."

In fiscal year 2014, the firm returned $2.5bn to shareholders in the form of dividends and share redemptions. The Company also successfully raised $1.8bn in investment grade debt in fiscal 2014, extending its weighted average maturity to approximately seven years and decreasing its weighted average interest to approximately 5%. Cash, cash equivalents, restricted cash, and short-term investments totalled approximately $2.7bn at the end of the fiscal year. There were 327 million ordinary shares issued and outstanding as of the end of the fiscal year.

Luczo added: "The shifting information technology market dynamics are disrupting the traditional storage industry in meaningful ways and continue to create more opportunities for Seagate. As we plan for our next fiscal year, we remain focused on investing in our storage technology product portfolio to deliver high quality storage products and solutions for our customers, as well as continuing to create long-term value for our shareholders."

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