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Data storage solutions provider $STX said its GAAP earnings were impacted by an increase in income tax provision in 2Q18, while revenues remained broadly unchanged at $2.9BIl. Excluding the special items, earnings increased to $1.48 per share, surpassing expectations. The adjusted profit benefited from improved margins from the core business.
Storage solutions provider $STX said it anticipates to record revenues of about $2.9Bil in 2Q18, and gross margin of 30%. GAAP and Non-GAAP operating expenses are expected to be $444MM and $390MM, respectively. Seagate sees capacity shipments growing to a record of 88 exabytes in the December quarter.
For the second quarter of 2018, $STX anticipates a 3-5% sequential growth in revenues, and sees margins rising modestly to 29-33%. Non-GAAP operating expense is forecast to drop 2-3% compared to the first quarter, helped by the ongoing cost control initiatives.
After posting better-than-expected earnings numbers in 1Q18, $STX said it sees the market for its 10-TB and 12-TB storage products growing further in 2Q18. Capex is expected to drop quarter-over-quarter in the December quarter and remain less than 5% of the total FY18 revenue. Operating cash flow is forecast to more than double sequentially.
$STX said its 10-TB Nearline storage products contributed significantly to overall revenues in 1Q18. The company plans to enter into a long-term partnership with the Memory division of Toshiba Corp. as part of improving its financials by expanding the product portfolio. The terms of the deal will be disclosed later.
Benefiting from a decrease in overall expenses, earnings of $STX gained about 8% in 1Q18 to reach $181MM. Earnings per share moved up to $0.62 and adjusted earnings rose to $0.96 per share, exceeding expectations. However, revenues of the data storage solutions provider dropped 6% annually to $2.6Bil, despite registering record exabyte shipments.
Supercomputer company $CRAY has entered into a partnership with $STX to add the latter’s ClusterStor high-performance storage business into its storage business. As per the agreement, Cray will continue to support and enhance the ClusterStor product line. The company expects to add more than 100 employees, as part of the deal.
$STX’s net income surged 63% to $114MM in 4Q17, despite a 10% fall in revenues. EPS increased to $0.38 from $0.23. On a non-GAAP basis, excluding the impact of special items, net income was $192MM or $0.65 per share. The bottom line growth was supported by increased demand for the company’s storage products.
For 4Q17, $STX expects revenue to be $2.5-2.6Bil. This outlook reflects the seasonal decline in revenue, the company's desire to maintain lower inventories going into the summer months and some conservatism due to the potential impact of component shortages. For calendar 2017, EPS is expected to be at least $4.50.
$STX swung to a profit in 3Q17 from a loss last year, driven by lower costs and expenses. Net income was $194MM or $0.65 per share compared to a loss of $21MM or $0.07 per share last year. Revenue grew to $2.67Bil from $2.59Bil. Non-GAAP EPS for the latest quarter was $1.10.
$STX generated cash flow from operations of $656MM in 2Q17, up 72% YoverY. HDD exabyte shipments grew 13% YoverY to 68.2 exabytes, representing the third consequtive quarter of record exabyte shipments. HDD unit shipments were 39.9MM units for the quarter.