Hard Drive Maker Posts 18% YoY Growth in Q2 Revenue

Source: Streetwise Reports   01/27/2022

Shares of hard drive storage maker Seagate Technology Holdings Plc. traded 8% higher after the company reported Q2/22 financial results that featured 39% YoY increase in free cash flow.

After U.S. financial markets closed yesterday, computer hard drive manufacturer and cloud storage company Seagate Technology Holdings Plc. (STX:NASDAQ), announced financial results for the second quarter of 2022 ended December 31, 2021.

Seagate Technology’s CEO Dave Mosley commented, “Calendar 2021 was an outstanding year for Seagate. Compared with the prior calendar year, we grew revenue by 18% and more importantly, delivered free cash flow growth of 39%, which we are deploying effectively into our long-standing capital returns program.”

“The calendar year was capped by strong December quarter performance including our highest revenue level in over 6-years, supported by cloud data center demand for our high capacity nearline products…we expect to build on our 2021 performance this calendar year and beyond as favorable demand trends support revenue expansion consistent with our long-term financial model range of 3-6% growth,” CEO Mosley added.

The company reported that in Q2/22 it posted revenue of $3.12 billion, compared to $2.62 billion in Q2/21.

The firm noted that it saw improvements in both its GAAP gross and operating margins. The company listed that gross margin in Q2/22 was 30.4%, versus 26.5% in Q2/21, and its operating margin improved to 18.6%, compared to 13.3% in Q2/21.

For Q2/22, Seagate stated that it earned GAAP net income of $501 million, or $2.23 per diluted share, compared to GAAP net income of $280 million, or $1.12 per diluted share in Q2/21.

The company added that in Q2/22, it generated cash flow from operations of $521 million and free cash flow of $426 million.

The company listed that its Board of Directors has authorized a $0.70 per share quarterly dividend payable on April 6, 2022, to shareholders of record as of March 22, 2022.

Seagate provided some forward guidance and advised that for Q3/22, it expects revenue of between $2.75-3.05 billion. The company added that it estimates Q3/22 non-GAAP diluted EPS will come in at $2.00, plus or minus $0.20. The firm indicated that the non-GAAP diluted EPS guidance “excludes known charges related to amortization of acquired intangible assets of $0.02 per share and estimated share-based compensation expenses of $0.17 per share.”

Seagate Technology is a manufacturer and provider of precision-engineered electronic data storage devices and data management solutions. The company claimed that during the last 40 years it has shipped devices totaling greater than three billion terabytes of data capacity. The firm’s principal products are SATA hard disk and solid-state disk drives and peripheral component interconnect express (PCIe) cards. Its newer product offerings are designed for applications in enterprise servers and storage systems and client compute and non-compute applications.

Seagate Technology started the day with a market cap of around $21.4 billion with approximately 222.6 million shares outstanding and a short interest of about 4.3%. STX shares opened more than 11% higher today at $107.29 (+$10.98, +11.40%) over yesterday’s $96.31 closing price. The stock has traded today between $102.52 and $117.03 per share and is currently trading at $104.16 (+$7.85, +8.15%).

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