Seagate Sticks a Double: Fool by Numbers

On Jan. 18, Seagate Technology (NYSE: STX  ) released Q2 2006 earnings for the period ending Dec. 30, 2005.

  • Both sales and earnings per share easily surpassed Street estimates, lending further credence to the turnaround story under way at Seagate.
  • Still, inventory growth outpaced sales growth by 15%. That's not usually a good sign, but it could mean that the firm is gearing up for an expected uptick in orders. (Get further insights here.)
  • Why is Seagate doing so well? A stat from the earnings release may provide a clue: Total demand for storage eclipsed 35 million terabytes during 2005, a 60% increase from the year before. Wow.

(Figures in millions, except per-share data)

Income Statement Highlights

Avg. Est.

Q2 2006

Q2 2005

% Change

Sales

$2,200

$2,300

$1,847

+24.5%

Net Profit

--

$287

$144

+99.3%

EPS

$0.52

$0.57

$0.29

+96.6%

Get back to basics with a look at the income statement.

Margin Checkup

Q2 2006

Q2 2005

Change

Gross Margin

25.70%

20.57%

+5.13%

Op. Margin

12.35%

7.96%

+4.39%

Net Margin

12.48%

7.80%

+4.68%

Margins are the earnings engine. See how they work..

Balance Sheet Highlights

Assets

Q2 2006

Q2 2005

% Change

Cash+ ST Invest.

$1,751

$1,476

+18.6%

Inventory

$505

$362

+39.5%

Accounts Rec.

$1,091

$878

+24.3%


Liabilities

Long-Term Debt

$400

$742

-46.1%

Accounts Pay.

$1,057

$878

+20.4%

Cash Flow Highlights

Q2 2006

Q2 2005

% Change

Cash From Ops

$768

$497

+54.5%

Capital Expend.

$353

$185

+90.8%

Free Cash Flow

$415

$312

+33%



Find out why Fools always follow the money.

Related Companies:

  • EMC (NYSE: EMC  )
  • Hitachi (NYSE: HIT  )
  • IBM (NYSE: IBM  )
  • Maxtor (NYSE: MXO  )
  • Sun Microsystems (Nasdaq: SUNW  )
  • Western Digital (NYSE: WDC  )

Related Foolishness:

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so checkFool.comfor more of our in-depth discussion of what the numbers mean.

Fool contributorTim Beyersdidn't own shares in any of the companies mentioned in this story at the time of publication. You can find out what is in his portfolio by checking Tim's Foolprofile. The Motley Fool has an ironcladdisclosure policy.


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