Story image

Seagate struggles to maintain revenue in challenging IT storage industry

02 May 2016

Seagate has experienced another drop in revenue for the third quarter of 2016, with the vendor claiming the decline is due to ‘several near-term demand factors’.

Total revenue for the quarter was $2.6 billion, while revenue for Q2 2016 was $3.0 billion. Revenue for the same quarter a year ago was $3.3 billion.

On top of this, the company reported gross margin of 20.2%, net loss of $21 million, and diluted loss per share of $0.07. On a non-GAAP basis, which excludes the net impact of certain items, Seagate reported gross margin of 22.7%, net income of $66 million and diluted earnings per share of $0.22.

During the third quarter, the company generated approximately $205 million in operating cash flow and paid cash dividends of $188 million. There were 298 million ordinary shares issued and outstanding as of the end of the quarter. Cash, cash equivalents and short-term investments totaled approximately $1.2 billion at the end of the quarter.

“Our quarterly results fell short of our expectations as a result of several near-term demand factors. Despite these challenges, we believe we have the product portfolio, technology roadmap and operational leverage to ensure we are well-positioned for long-term success,” says Steve Luczo, Seagate chairman and chief executive officer.

“Accordingly, we are aggressively working to position Seagate to respond to new demand levels and are committed to ongoing financial discipline," he says.

In a statement Luczo emphasised the fact that the company is focused on rising to the growing demands of the IT storage industry, and maintaining its current strengths.

He says, “Although the short-term dynamics of our industry are challenging, we continue to see significant and growing Exabyte demand, particularly as enterprise applications shift to cloud environments.

“As we look forward, our strategic focus is unchanged - we are broadening our storage portfolio to meet the needs of our growing global customer base, building upon our strong competitive position and optimising our business for continued financial performance. These focus areas will enable us to build lasting value for shareholders.”

Lenovo outlines new range of Legion mobile gaming devices
The newest offerings include the latest Intel processors and NVIDIA GPUs to support modern gaming needs.
IDC: Manufacturing driving digital transformation spending in 2019
IDC forecasts global DX spending to reach US$1.18 trillion in 2019, an increase of 17.9% over 2018.
Intel announces “most powerful mobile processors ever”
Improvements in performance, responsiveness and Wi-Fi connectivity will be rolling out for gamers and creators alike.
Application virtualisation market to reach $5bn by 2024
According to a report by KBV Research, cost-saving and productivity benefits will drive the market over the next 5 years.
Slack's 2019 feature roadmap unveiled
Including shared channels across organisations, workflow automation, greater email and calendar integration, and streamlined search.
Data#3 wins learning and development award two years running
Chief Learning Officer magazine’s LearningElite programme honours the best organisations for learning and development.
emt Distribution adds risk intelligence vendor
Flashpoint has signed emt Distribution to provide channel partners in Oceania and South East Asia a solution for illicit threat actor communities.
Intel releases 8th gen vPro mobile processors
This generation promises longer battery life, better performance, and comes with a built-in hardware security solution, Intel Hardware Shield.