Seagate Technology PLC (NASDAQ: STX) stock lost over 5.2% in the pre-market session on 5th February 2019 (Source: Google finance).
In the second quarter, the company had generated $288 million in cash flow from operations and $161 million in free cash flow. Year to date, the Company has generated $875 million in cash flow from operations and $571 million in free cash flow.
STX in the second quarter of FY 19 has reported the adjusted earnings per share of $1.41, beating the analysts’ estimates for the adjusted earnings per share of $1.28. The company had reported 6.5 percent fall in the adjusted revenue to $2.72 billion in the second quarter of FY 19. The non-GAAP gross margin was 29.7% during the second quarter in line with the long-term margin range target of 29% to 33% of revenue. The sequential decline of 130 basis points was mainly due to overall product portfolio mix and in particular to a decline in the nearline volumes sold. Non-hard disc drive revenue in the December quarter were $225 million, up 8% year-over-year mainly driven by higher SSD revenue. Cloud system decreased year-over-year due to a planned end of life of some legacy OEM cloud system products. SSD revenue were up both year-over-year and sequentially. STX is optimistic about the long-term opportunities as the company invest in developing a broad-based SSD product portfolio in the SaaS, NVMe, consumer and gaming market.
Moreover, in the second quarter, STX has shipped a total of 36.4 exabyte in the enterprise market, down 3% compared to last year’s strong demand. The average capacity for enterprise drive was 4.5 terabyte, up 4% year-over-year. In the mission critical market, the company continued to address strong demand that resulted in 44% year-over-year exabyte growth with average capacity per drive over 1.1 terabyte, up 30% year-over-year.
STX’s balance sheet is healthy and during the second quarter, the company had paid cash dividends of $180 million, repurchased 3.2 million ordinary shares for $136 million and repaid $499 million of the 2018 Senior Notes. Cash and cash equivalents totaled $1.4 billion at the end of the quarter. STX has declared a quarterly cash dividend of $0.63 per share, which will be payable on April 3, 2019 to shareholders of record as of the close of business on March 20, 2019.
Capital expenditures on a cash basis were approximately $127 million in the December quarter. For FY 19, the company expect total capital expenditures to be at the low end of our long-term range of 6% to 8% of revenue.