Computer storage device maker Seagate Technology plc (STX) reported Friday a profit for the third quarter that declined 26 percent from last year, despite improved gross margins, reflecting higher operating expenses and a revenue drop. Adjusted earnings per share topped analysts' expectations, while quarterly revenues missed their estimates.
"In light of dynamic market conditions this quarter we are quite satisfied with our operational performance and ability to return value to shareholders," Chairman and CEO Steve Luczo said.
The Dublin, Ireland-based hard-disk drive maker reported net income of $291 million or $0.88 per share for the third quarter, lower than $395 million or $1.17 per share in the prior-year quarter. Excluding items, adjusted net income for the quarter was $357 million or $1.08 per share, compared to $453 million or $1.34 per share in the year-ago quarter.
On average, 20 analysts polled by Thomson Reuters expected the company to report earnings of $1.04 per share for the quarter. Analyst' estimates typically exclude special items.
Revenues for the quarter decreased to $3.33 billion from $3.41 billion in the same quarter last year, and missed nineteen Wall Street analysts' consensus estimate of $3.40 billion.
However, storage shipments of HDD's only, grew 8.6 percent year-over-year to 55.2 Exabytes or EB.
Gross margin for the quarter improved 50 basis points to 28.7 percent from last year's 28.2 percent.
Operating income for the quarter declined to $343 million from $444 million, and operating expenses totaled $612 million, higher than $515 million in the year-ago quarter.
The company's board of directors also approved a quarterly cash dividend of $0.54 per share, payable on May 15 to shareholders of record as of the close of business on May 1, 2015.
The company added that 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 and other factors deemed relevant by the Board.
"Near-term macro uncertainty is affecting certain areas of our addressable market however we remain optimistic that market demand for exabytes of storage will continue to increase over the long-term. Looking ahead, we are focused on aligning our storage technology portfolio effectively to capitalize on market growth opportunities, demonstrating operating profitability and returning value to shareholders," Luczo added.
STX closed Thursday's regular trading session at $55.96, down $0.14 on a volume of 4.45 million shares. In the past 52-week period, the stock has been trading in a range of $48.49 to $69.40.
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