Seagate Technology plc (NASDAQ: STX) (the “Company” or “Seagate”) recently reported financial results for its fiscal third quarter ended April 2, 2021.
“Seagate delivered another quarter of strong financial performance driven by ongoing operational execution and record sales of our high capacity nearline drives. We grew revenue, expanded profitability and achieved non-GAAP EPS above our guided range. Our March quarter results underscore the strength of our HDD product portfolio and increasing demand for mass capacity storage,” said Dave Mosley, Seagate’s chief executive officer.
“These trends lend further support to our June outlook, including an anticipated return to solid year-over-year revenue growth in the June quarter and enhanced profitability. As the datasphere continues to grow in scale and complexity, our innovative technology, flexible product roadmap and mass data expertise make us well positioned to capture significant opportunities in our core HDD business and address customers’ emerging needs to move, secure and store data across a more distributed enterprise.”
The Company generated $378 million in cash flow from operations and $274 million in free cash flow during the fiscal third quarter 2021. Seagate maintained a healthy balance sheet and during the fiscal third quarter 2021, the Company paid cash dividends of $161 million and repurchased 11.3 million ordinary shares for $751 million. Cash and cash equivalents totalled $1.2 billion at the end of the quarter. There were 230 million ordinary shares issued and outstanding as of the end of the quarter.
For a detailed reconciliation of GAAP to non-GAAP results, see accompanying financial tables.
Seagate has issued a Supplemental Financial Information document, which is available on Seagate’s Investor Relations website at investors.seagate.com.
Quarterly Cash Dividend
The Board of Directors of the Company (the Board) declared a quarterly cash dividend of $0.67 per share, which will be payable by the Company on July 7th, 2021 to shareholders of record as of the close of business on May 12th, 2021 (“the record date”). The record date has been set to occur before the Irish High Court (“Irish Court”) hearing that we expect to be held on or around May 18th, 2021, subject to the Irish Court’s availability, to approve the Scheme of Arrangement that Seagate shareholders approved on April 14th, 2021. The Scheme of Arrangement is part of the proposed transaction described in the proxy statement filed with the U.S. Securities and Exchange Commission on March 3rd, 2021. Assuming the Scheme of Arrangement is approved by the Irish Court and consummated, the proposed transaction is intended to create additional distributable reserves in the new group parent company, Seagate Technology Holdings plc, which are required under Irish law for shareholder distributions such as dividends or share repurchases.
The payment of any future quarterly dividends will be at the discretion of the Board and will be dependent upon Seagate’s financial position, results of operations, available cash, cash flow, capital requirements, distributable reserves, and other factors deemed relevant by the Board.
Business Outlook
The business outlook for the fiscal fourth quarter 2021 is based on our current assumptions and expectations; actual results may differ materially, as a result of, among other things, the important factors discussed in the Cautionary Note Regarding Forward-Looking Statements section of this release.
The Company is providing the following guidance for its fiscal fourth quarter 2021:
- Revenue of $2.85 billion, plus or minus $150 million
- Non-GAAP diluted EPS of $1.60, plus or minus $0.15
Guidance regarding non-GAAP diluted EPS excludes known charges related to amortisation of acquired intangible assets of $0.02 per share and estimated share-based compensation expenses of $0.14 per share.
We have not reconciled our non-GAAP diluted EPS guidance for fiscal fourth quarter 2021 to the most directly comparable GAAP measure because material items that may impact these measures are out of our control and/or cannot be reasonably predicted, including, but not limited to, accelerated depreciation, impairment and other charges related to cost saving efforts, restructuring charges, strategic investment losses or impairment recognised, income tax adjustments on these measures, and other charges or benefits that may arise. The amounts of these measures are not currently available, but may be material to future results. A reconciliation of the non-GAAP diluted EPS guidance for fiscal fourth quarter 2021 to the corresponding GAAP measures is not available without unreasonable effort. A reconciliation of our historical non-GAAP financial measures to their nearest GAAP equivalent is contained in this release.