Seagate Earnings: Revenues, Margins Fall Due To Low Shipments Across Divisions
Seagate (NASDAQ:STX) announced Q3 FY 2016 results, reporting a 22% decline in net revenues to just under $2.6 billion. [1] The company’s gross margin (GAAP) fell by over 8 percentage points to 20.2% for the quarter while the non-GAAP gross margin was down by about 3 percentage points to about 23%. As a result, the company’s reported net income and non-GAAP EPS were significantly lower than the comparable prior year period.
Revenues were down primarily due to low shipments across various segments including PC, notebook, enterprise and branded products. [2]
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Seagate witnessed particularly low demand for mission-critical enterprise hard disk drives (HDD) in the March quarter, which led to limited growth in the enterprise segment. [3] Enterprise storage systems and flash storage have been the growing segments within the company over the past few quarters.
The company reported its preliminary set of Q3 FY 2016 results in early April. which led its stock to fall by over 20% in a week. Below you can see our full year revenue forecast for Seagate’s various divisions.
Have more questions about Seagate? See the links below:
- What’s Seagate’s Revenue & Earnings Breakup?
- What’s Seagate’s Fundamental Value Based On Expected 2015 Results?
- How Has Seagate’s Revenue Composition Changed Between 2012 And 2015?
- Seagate’s Revenue & EBITDA Growth in The Next 5 Years: Trefis Estimate
- How Will The Composition Of Seagate’s Unit Shipments Vary From 2015 Through 2019?
- Why We Revised Our Price Estimate For Seagate To $39
- Why Has Seagate’s Stock Price Plummeted By 20% This Week?
Notes:
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- Seagate Technology Reports Fiscal Third Quarter 2016 Financial Results, Seagate Press Release, April 2016 [↩]
- Seagate Supplemental Fact Sheet, Seagate Press Release, April 2016 [↩]
- Seagate Q3 2016 Earnings Call Transcript, Seeking Alpha, April 2016 [↩]