Seagate Technology plc (STX: Quote) said Monday after the markets closed that its fourth quarter profit rose sharply from last year, as revenue surged and margins improved significantly due to strong demand for hard drives amid continued recovery following the Thailand floods.
However, the company's quarterly earnings per share, excluding items, came in below analysts' expectations as did its quarterly revenue.
"As we announced previously, we were disappointed not to meet our revenue and margin plan for the fourth quarter as a result of the industry's faster recovery from the supply chain disruption and an isolated supplier issue that we experienced," said Steve Luczo, Seagate chairman and chief executive officer. "Nevertheless, we are pleased to have achieved record revenue and unit shipments for the June quarter, which enabled Seagate to continue to return significant value to shareholders through dividends and share repurchases."
Earlier this month, Seagate had lowered its revenue and adjusted gross margin forecast for the fourth quarter, due to reduced shipments in response to the industry's faster than expected recovery from the supply chain disruption and an isolated quality issue with a component supplier. Monday's results matched those reduced expectations.
Seagate shares are currently losing 2.66% in after hours trading after closing the day's regular trading session at $30.43, up 42 cents or 1.40%. the shares trade in a 52-week range of $9.05 to $32.55.
The hard-drive industry was severely affected by the heavy floods in Thailand in early October. The situation has been steadily improving since mid-December.
Seagate also closed its acquisition of the hard disk drive business of South Korea's Samsung Electronics Co., Ltd in December.
The company shipped a record 65.9 million hard drives during the June quarter, with enterprise class shipment up 9%, client compute shipment up 30% and non-compute shipments up 24%.
For the fourth quarter ended June 29, 2012, the Dublin, Ireland-based company reported net income of $1.01 billion or $2.37 per share, compared to $119 million or $0.27 per share for the year-ago quarter.
Excluding items, adjusted net income for the latest quarter was $1.03 billion or $2.41 per share.
On average, 21 analysts polled by Thomson Reuters expected the company to earn $2.51 per share for the fourth quarter. Analysts' estimates typically exclude special items.
Gross margin for the quarter improved significantly to 33.1% from 19.3% a year earlier. Adjusted gross margin for the latest quarter was 33.6%.
Revenue for the fourth quarter jumped 57% to $4.48 billion from $2.86 billion in the same quarter last year. Sixteen analysts had a consensus revenue estimate of $4.56 billion for the fourth quarter.
During the June quarter, Seagate used about $1.2 billion to redeem about 45 million ordinary shares.
The company said Monday that its Board of Directors has approved a quarterly cash technology-plc.aspx'>dividend of $0.32 per share, payable on August 29 to shareholders of record on August 14. The new dividend represents a 28% increase from the company's previous quarterly dividend of $0.25 per share.
Separately, Seagate said that Gary Gentry has rejoined the company to lead its solid state drive business as senior vice president, SSD.
Rival Western Digital Corp. (WDC) last week reported fourth quarter profit that more than quadrupled from last year, as revenue surged and margins improved sharply amid strong growth in hard-drive shipments. The company's quarterly earnings per share, excluding items, also breezed past Wall Street expectations as did its quarterly revenue.
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by RTT Staff Writer
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