Seagate Technology reports fiscal second quarter 2008

Seagate Technology reported disc drive unit shipments of approximately 50 million, revenue of $3.4 billion, GAAP net income of $403 million, and diluted net income per share of $0.73 for the quarter ended December 28, 2007. GAAP net income and diluted net income per share includes approximately $31 million of purchased intangibles amortization and other charges associated with the Maxtor, EVault and MetaLINCS acquisitions and also a net gain from asset sales of approximately $15 million. Excluding these items, non-GAAP net income and diluted net income per share were $419 million and $0.76. Included in both GAAP and non-GAAP results are restructuring charges of approximately $27 million or approximately $0.05 per share.

For the six months ended December 28, 2007 Seagate reported revenue of $6.7 billion, GAAP net income of $758 million, and diluted net income per share of $1.37. GAAP net income and diluted net income per share includes approximately $61 million of purchased intangibles amortization and other charges associated with the Maxtor, EVault and MetaLINCs acquisitions and also a net gain from asset sales of approximately $15 million. Excluding these items, non-GAAP net income and diluted net income per share were $804 million and $1.45. Included in both GAAP and non-GAAP results are restructuring charges of approximately $32 million or approximately $0.06 per share.

“Seagate’s strong financial performance in the quarter reflects the company’s solid business model and expanded product portfolio, which positioned us well in a favorable industry environment characterized by seasonal strength across all storage markets and continued growth in global demand,” said Bill Watkins, Seagate chief executive officer. “During the quarter, Seagate achieved record shipments and experienced some capacity constraints, underscoring the phenomenal growth of digital content in both the consumer and commercial markets. Based on unit demand across all categories, we entered the March quarter in a position of strength. The storage industry remains one of the world’s most important and exciting industries. We are confident Seagate’s vision, technology, and operational excellence will drive us to continued strong financial and operating performance in the March quarter and double-digit year-over-year growth.”

Adjustments made to GAAP net income and diluted net income per share can be found following the financial statements included with this press release. Additional information relating to the financial results for the second fiscal quarter of 2008 can be found online at seagate.com.

Business Outlook
For the March quarter, Seagate expects to report revenue of $3.2 - $3.3 billion, and GAAP diluted net income per share of $0.57 - $0.61. Excluding approximately $27 million of purchased intangibles amortization and other charges associated with past closed acquisitions, including MetaLINCS, non-GAAP diluted net income per share for the March quarter is expected to fall within the range of $0.62 - $0.66. At the mid-point, this guidance represents a 15% revenue increase year-over-year and a 36% non-GAAP diluted earnings per share increase year-over-year.

This guidance does not include the impact of any future acquisitions, stock repurchases or restructuring activities the company may undertake.

Dividend and Stock Repurchase
The company has declared a quarterly dividend of $0.10 per share to be paid on or before February 15, 2008 to all common shareholders of record as of February 1, 2008.

During the quarter ended December 28, 2007, the company repurchased approximately 9.3 million of its common shares related to its share repurchase plan. The average price of the shares delivered to the company in the December quarter was $27.00. The company has authorization to purchase approximately $474 million of additional shares under the current stock repurchase program and the company anticipates utilizing the remaining authorization within the March quarter.

Seagate