Seagate Advances on Dividend, Sales That Exceed Predictions
Seagate Technology Plc (STX), the world’s largest maker of computer disk drives, gained in late trading after saying it would pay a quarterly dividend of 18 cents and reporting quarterly sales that topped analysts’ predictions.
Sales in the fiscal third quarter, which ended April 1, were about $2.7 billion, Scotts Valley, California-based Seagate said in a statement today. Analysts, on average, had predicted revenue of $2.62 billion, data compiled by Bloomberg show. The stock rose as much as 7.9 percent to $15.85 in extended trading.
The results contrast with a report in January that showed second-quarter profit below analysts’ projections. Those figures fueled concern that Seagate would suffer as consumers favor smartphones and other consumer electronics, such as Apple Inc.’s iPad, that don’t rely on hard-disk storage.
Seagate said today it had shipments of 49 million and gross margin as a percentage of revenue “near or slightly above the high end” of a range of 18 percent to 19 percent last quarter. The company had shipments of 48.9 million and gross margin of 19.5 percent in the second quarter.
To counter a slump in demand for hard disks, Seagate is working to develop alternatives, such as external devices that connect to tablets to deliver music and other content, and so- called hybrid drives, which contain components of both hard disks and the flash drives that are growing in popularity.
Seagate spurned an acquisition offer of more than $7.5 billion from TPG Capital in November and turned down a takeover proposal from rival Western Digital Corp., people familiar with the matter have said.
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