Computer storage device maker Seagate Technology plc (STX) reported Monday a profit for the first quarter that declined from last year, despite revenue growth amid improved shipments, reflecting lower gross margin and higher operating expenses. Adjusted earnings per share and quarterly revenues topped analysts' expectations.
"We achieved strong financial results in the first fiscal quarter, driven by consistent execution and better-than-anticipated market demand for our PC and Cloud storage products," Chairman and CEO Steve Luczo said.
The Dublin, Ireland-based hard-disk drive maker reported net income of $381 million or $1.13 per share for the first quarter, lower than $427 million or $1.16 per share in the prior-year quarter.
Excluding items, adjusted net income for the quarter was $453 million or $1.34 per share, compared to $473 million or $1.29 per share in the year-ago quarter.
On average, 23 analysts polled by Thomson Reuters expected the company to report earnings of $1.25 per share for the quarter. Analyst' estimates typically exclude special items.
Revenues for the quarter increased to $3.79 billion from $3.49 billion in the same quarter last year, and topped twenty-one Wall Street analysts' consensus estimate of $3.63 billion.
Storage shipments of HDD's only grew 22 percent year-over-year to 59.9 Exabytes. The company said it shipped the world's first 8 TB HDD, boasting ultra-high capacity, energy-efficiency and the lowest total cost of ownership or TCO in the industry.
Gross margin for the quarter contracted 20 basis points to 27.8 percent from last year's 28.0 percent.
Operating income for the quarter declined to $456 million from $478 million, and operating expenses totaled $595 million, higher than $497 million in the year-ago quarter.
"We continue to improve our position in the evolving storage market by leveraging and investing in our core storage technology and expanding our product portfolio with Cloud systems and solutions and integrated flash technology," Luczo added.
On October 22, the company's board of directors approved a 26 percent higher quarterly cash dividend of $0.54 per share, payable on November 25 to shareholders of record as of the close of business on November 11, 2014.
The company added that it remains confident in its cash flow generation and the opportunities ahead for Seagate as evidenced by its recently announced target annual dividend increase of 26 percent to $2.16.
STX closed Friday's regular trading session at $58.36, up $1.62 or 5.49% on a volume of 4.48 million shares. In the past 52-week period, the stock has been trading in a range of $46.99 to $63.27.
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