Seagate Spins Earnings: Fool by Numbers

On Tuesday, Seagate Technology (NYSE: STX  ) released second-quarter 2007 earnings for the period ended Dec. 29.

  • Seagate's acquisition of Maxtor and the early retirement of a portion of its 8% notes created $95 million in one-time charges. Without them, per-share earnings would have been $0.39.
  • Operating margin dropped because of acquisition and related charges but should recover when the remaining charges from the Maxtor deal are worked through the system.
  • For the third quarter, management expects Seagate to earn between $0.56 and $0.60 (non-GAAP) on $2.9 billion to $3 billion in sales. For the year, executives say to expect $1.70 to $1.75 (non-GAAP) on $11.5 billion to $11.7 billion in revenue.
  • For trivia buffs: Seagate is the first in the history of the hard-drive industry to book $3 billion in revenue in a quarter.

(Figures in millions, except per-share data)

Income Statement Highlights

Q2 2006

Q2 2005

Change

Sales

$2,996

$2,300

30.3%

Net Profit

$140

$287

(51.2%)

EPS

$0.23

$0.57

(59.6%)

Diluted Shares

598

507

17.9%



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

Margin Checkup

Q2 2006

Q2 2005

Change*

Gross Margin

18.22%

25.70%

(7.48)

Operating Margin

5.54%

12.35%

(6.81)

Net Margin

4.67%

12.48%

(7.81)

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q2 2006

Q2 2005

Change

Cash + ST Invest.

$1,560

$1,751

(10.9%)

Accounts Rec.

$1,251

$1,091

14.7%

Inventory

$771

$505

52.7%



Liabilities

Q2 2006

Q2 2005

Change

Accounts Payable

$1,425

$1,057

34.8%

Long-Term Debt

$2,068

$970

113.2%



Learn the ways of the balance sheet.

Cash Flow Checkup

Q2 2006

Q2 2005

Change

Cash From Ops.

$301

$768

(60.8%)

Capital Expenditures

$466

$353

32.0%

Free Cash Flow

($165)

$415

N/A



Find out why Fools always follow the money.

Related Companies:

  • EMC (NYSE: EMC  )
  • Hitachi (NYSE: HIT  )
  • 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 check Fool.com for more of our in-depth discussion of what the numbers mean.

High-tech. Biotech. Nanotech. Any tech. David Gardner and his team at Motley Fool Rule Breakers cover it all, and as a result, they're unearthed six stocks that have more than doubled in the first two years of the service. Sound intriguing? Click here to test-drive the service free for 30 days. There's no obligation to subscribe.

Fool contributor Tim Beyers, ranked 660 out of more than 20,600 in Motley Fool CAPS, owns shares of Seagate. Get the skinny on all the stocks he owns by checking Tim's Fool profile. The Motley Fool's disclosure policy always adds up.


Read/Post Comments (0) | Recommend This Article (18)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 520495, ~/Articles/ArticleHandler.aspx, 4/20/2014 5:28:44 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement