U.S. data storage company Seagate Technology reported financial results for its fiscal third quarter this afternoon, ending the period with non-GAAP earnings per share of $1.26 on revenue of $3.5 billion.
Analysts were expecting earnings per share of $1.19. on revenue of $3.37 billion.
The company's shares were down a half-percentage point in after-hours trading.
Stats to know:
Gross margin of 27.6 percent (down from Q2's
Net income of $464 million (down from Q2's $523 million)
$678 million in operating cash flow
$2 billion in cash and equivalents
The company did not indicate how many units it shipped in Q3, but it did say that it repurchased three million ordinary shares (for about $102 million) and paid $379 million for the early redemption of long-term debt.
"The continued advancement of cloud, mobile and open source computing are trends that are shifting data volumes toward personal and corporate cloud environments, creating tremendous opportunities," chairman, president and CEO Steve Luczo said in prepared remarks. "Our top priorities are focused on the efficiency of our operations, extending our leadership in storage technology innovation and returning value to shareholders."
Shares of rival Western Digital were also trading down a half-percentage point in after-hours trading.
The two companies are locked in a bitter contest for the top spot in the storage space. Western Digital is ahead, but Seagate dominates the higher-margin enterprise market, which is particularly important as more and more data is stored "in the cloud." Together, they make up more than 80 percent of the entire market, which includes hard-disk drives for desktop and notebook computers, enterprise applications and consumer electronics.
For the previous quarter, Seagate reported earnings of $1.30 on revenue of $3.7 billion, and shipped 58 million units. During the Q2 conference call, Luczo offered a Q3 projection of revenue between $3.25 billion and $3.45 billion and warned of a "flat to down" market as PC sales continue to slump. Analysts curtailed their expectations over the course of the quarter.
So how did Seagate manage its small surprise win? By cutting costs: