Seagate Technology PLC (NASDAQ:STX) reported financial results for the second quarter of fiscal year 2016 ended January 1, 2016. For the second quarter, the Company reported revenue of approximately $3.0 billion, gross margin of 24.8%, net income of $165 million and diluted earnings per share of $0.55. On a non-GAAP basis, which excludes the net impact of certain items, Seagate reported gross margin of 25.6%, net income of $246 million and diluted earnings per share of $0.82. For a detailed reconciliation of GAAP to non-GAAP results, see the accompanying financial tables.
During the second quarter, the Company generated approximately $382 million in operating cash flow, paid cash dividends of $188 million and repurchased approximately 2.9 million ordinary shares for $107 million. There were 296 million ordinary shares issued and outstanding as of the end of the quarter. Cash, cash equivalents and short-term investments totaled approximately $1.3 billion at the end of the quarter.
“Our results this quarter reflect the achievement of many of our operational goals, including improved profitability in our product portfolio and effective cost controls,” said Steve Luczo, Seagate’s chairman and chief executive officer. “Seagate sits in a favorable position as a leading storage solutions provider and we continue to believe that the long-term prospects for storage growth are strong. We are confident we have the right strategy and portfolio to continue delivering market-leading value to customers and generating strong returns for our investors through financial discipline.”
Quarterly Cash Dividend
The Company’s Board has approved a quarterly cash dividend of $0.63 per share, which will be payable on February 23, 2016 to shareholders of record as of the close of business on February 9, 2016. 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.(Original Source)
Shares of Seagate are up nearly 4% to $28.20. STX has a 1-year high of $63.39 and a 1-year low of $26.25. The stock’s 50-day moving average is $32.97 and its 200-day moving average is $40.93.
On the ratings front, Seagate has been the subject of a number of recent research reports. In a report issued on January 27, Citigroup analyst Stanley Kovler initiated coverage with a Sell rating on STX and a price target of $23, which represents a potential downside of 14.0% from where the stock is currently trading. Separately, on January 25, Jefferies Co.’s James Kisner maintained a Buy rating on the stock and has a price target of $35.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Stanley Kovler and James Kisner have a total average return of 2.5% and -9.6% respectively. Kovler has a success rate of 75.0% and is ranked #1771 out of 3594 analysts, while Kisner has a success rate of 42.1% and is ranked #3353.
The street is mostly Bullish on STX stock. Out of 10 analysts who cover the stock, 5 suggest a Buy rating , 3 suggest a Hold and 2 recommend to Sell the stock. The 12-month average price target assigned to the stock is $39.50, which represents a potential upside of 47.6% from where the stock is currently trading.
Seagate Technology PLC is a provider of electronic data storage solutions. Its products are hard disk drives, hard drives or HDDs. It also produces range of electronic data storage products including SSHD, SSD, PCIe cards and SATA controllers.