Seagate Technology Reports Fiscal Second Quarter 2010 Financial Results

Seagate Technology (NASDAQ:STX) today reported financial results for the quarter ended January 1, 2010 of 49.9 million disk drive unit shipments, revenue of $3.03 billion, gross margin of 30.5%, net income of $533 million and diluted earnings per share of $1.03. The financial results for the quarter include $10 million of purchased intangibles amortization expense or approximately $0.02 per diluted share.

For the six months ended January 1, 2010 the company reported 96.2 million disk drive unit shipments, revenue of $5.69 billion, gross margin of 27.7%, net income of $712 million and diluted earnings per share of $1.38. The financial results for the six months ended January 1, 2010 include $20 million of purchased intangibles amortization expense, $46 million of restructuring costs and a write down of long-lived assets of $64 million. The aggregate impact of these expense items is $130 million or approximately $0.25 per diluted share.

"Our strong financial performance in the December quarter was the result of our ongoing progress in driving operational efficiencies, our leadership position in high capacity, high performance products, an improved product mix and the overall strength of demand for digital storage,” said Steve Luczo, Seagate CEO.

Additional information relating to the financial results for the fiscal second quarter of 2010 can be found online at seagate.com.

Conference Call

Seagate will hold a conference call to review the second quarter results at 2:00 p.m. Pacific Time today. During today’s conference call, the company will provide an outlook for its third fiscal quarter of 2010, including key underlying assumptions.

The conference call can be accessed online at seagate.com or by phone as follows:

USA: (800) 713-8562
International: (617) 597-5310
Participant Passcode: 79349419

Replay

A replay will be available beginning today at 6:00 p.m. Pacific Time. The replay can be accessed from seagate.com.

About Seagate

Seagate is the world leader in hard disk drives and storage solutions. Learn more at seagate.com.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements include, but are not limited to, statements related to the Company’s future operating and financial performance in the March 2010 quarter, and thereafter, and include statements regarding expected revenue, gross margin, customer demand for disk drives and general market conditions. These forward-looking statements are based on information available to Seagate as of the date of this press release. Current expectations, forecasts and assumptions involve a number of risks, uncertainties, and other factors that could cause actual results to differ materially from those anticipated by these forward-looking statements. Such risks, uncertainties, and other factors may be beyond the Company’s control. In particular, the present global economic environment conditions may pose a risk to the Company’s operating and financial performance as consumers and businesses defer purchases in response to financial conditions. Such risks and uncertainties also include the impact of the variable demand, particularly in view of current business and economic conditions; dependence on Seagate’s ability to successfully qualify, manufacture and sell its disk drive products in increasing volumes on a cost-effective basis and with acceptable quality, particularly the new disk drive products with lower cost structures; the impact of competitive product announcements; and the Company’s ability to achieve projected cost savings. Information concerning risks, uncertainties and other factors that could cause results to differ materially from those projected in the forward-looking statements is contained in the Company's Annual Report on Form 10-K as filed with the U.S. Securities and Exchange Commission on August 19, 2009 and in the Company’s Quarterly Report on Form 10-Q as filed with the U.S. Securities and Exchange Commission on November 4, 2009, which statements are incorporated into this press release by reference. These forward-looking statements should not be relied upon as representing the Company’s views as of any subsequent date and Seagate undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date they were made.