On Jan. 18, Seagate Technology
- 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:
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EMC
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IBM
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Sun Microsystems
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Related Foolishness:
- Is there a bit of investing deja vu going on here?
- Seagate hasn't yet maxed out.
- Maybe this means the disk drive maker will get to shed its image as the Rodney Dangerfield of the industry?
- Seagate's sadistically sad tale is a distant memory these days.
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.
Fool contributor Tim Beyers didn'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 Fool profile . The Motley Fool has an ironclad disclosure policy .
