Seagate Technology PLC (NASDAQ:STX) Delivers the Goods

Seagate Technology PLC (NASDAQ:STX) just announced financial results for the quarter ended September 28, 2018, posting GAAP diluted earnings per share (EPS) of $1.54, up 148% year-over-year; non-GAAP diluted EPS of $1.70, up 77% year-over-year, and revenues of $3.0 billion, up 14% year-over-year. This was a very nice result, and the stock looks set to fare well in response amid what could turn out to be a heavy broad market tech sector tape.

“In the September quarter, we achieved strong financial results in revenue, profitability and cash flow, reflecting solid execution and positive demand for our products across multiple markets. By delivering competitive cost-effective mass storage solutions, Seagate is a crucial supplier in supporting the Data Age digital transformations that are happening across the storage marketplace. We believe our deep storage industry expertise, leading technology portfolio and focused execution will continue to drive long-term success for the company and deliver value to our shareholders,” said Dave Mosley, Seagate’s chief executive officer.

Seagate Technology PLC (NASDAQ:STX) bills itself as a company that provides data storage technology and solutions in Singapore, the United States, the Netherlands, and internationally.

It manufactures and distributes hard disk drives; solid state drives (SSDs), including serial attached small computer system interface and non-volatile memory express SSDs; solid state hybrid drives; and storage subsystems.

The company’s products are used in enterprise servers and storage systems; edge compute/client compute applications, primarily for desktop and mobile computing; and edge non-compute/client non-compute applications, such as various end user devices comprising portable external storage systems, surveillance systems, digital video recorders, network-attached storages, and gaming consoles, as well as data centers.

It also provides cloud systems and solutions portfolio that includes modular original equipment manufacturer (OEM) storage systems and scale-out storage servers.

In addition, the company offers external storage solutions under the Seagate Backup Plus and Expansion product lines, as well as under the LaCie and Maxtor brands in capacities up to 120TB. The company sells its products primarily to OEMs, distributors, and retailers.


Cash is King

As we discussed earlier, STX just announced earnings, including $587 million in cash flow from operations and $410 million in free cash flow, paid cash dividends of $181 million and repurchased 3 million ordinary shares for $150 million. Cash and cash equivalents totaled $1.9 billion at the end of the quarter.

The stock is up on the news. Overall, shares of STX have rallied about 14% over the past week. That sets up an interesting context for the action tomorrow.

In addition, the company also noted that the Board of Directors of the Company approved a quarterly cash dividend of $0.63 per share, which will be payable on January 2, 2019 to shareholders of record as of the close of business on December 19, 2018. 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.

Seagate Technology PLC (NASDAQ:STX) is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($1.9B against $3.2B, respectively). But the market isn’t holding its feet to the fire over this as long growth continues to pick up.

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