This week Seagate Technologies reported on its financial results for the first quarter of 2017. While all tech stocks have been less than spectacular, with the exception of a few, this is the second quarter in a row where things are looking up for Seagate’s finances. On top of better financial performance, Seagate’s stock is also showing an overall upward trend, albeit slowly.
This week Seagate Technologies reported on its financial results for the first quarter of 2017. While all tech stocks have been less than spectacular, with the exception of a few, this is the second quarter in a row where things are looking up for Seagate’s finances. On top of better financial performance, Seagate’s stock is also showing an overall upward trend, albeit slowly.
Image courtesy of Google Finance
Looking at the numbers for this quarter, Seagate had GAAP revenue of $2.8 billion, just slightly better than last quarter. Seagate’s net income was $167 million or diluted earnings per share of $0.55. This was leaps and bounds over the previous net income of $70 million. Seagate’s gross margin climbed up to 28.6% from 23.4% last quarter. Non-GAAP numbers showed a gross margin of 29.5%, net income of $299 million, and diluted earnings per share of $0.99. This quarter Seagate generated $592 million in operating cash and repurchased 3 million ordinary shares. Seagate plans on paying a quarterly dividend of $0.63/share on January 4, 2017.
Seagate’s main focus is still on spinning disk, as many others in the industry are looking to flash and emerging technology. Whether this will hurt them in the long term is yet to be seen. Spinning disk will most likely always have a place in the overall storage spectrum, much like tape does. But that place may diminish over time. At the moment though, the big push to move to cloud will be very beneficial for companies, such as Seagate, that continue to make high capacity HDDs. And if there is a sudden shift to SSDs, Seagate has already demonstrated its 60TB SSD earlier this year. When the tide turns, Seagate will most likely be able to turn effortlessly with it.
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