Seagate Updates Fiscal Fourth Quarter 2009 Financial Outlook; Provides Initial Outlook for Fiscal First Quarter 2010



    


    
    New product transitions, operational efficiencies and favorable pricing
drive higher than planned revenue and gross margin for the June 2009 quarter

    SCOTTS VALLEY, Calif., June 24 /PRNewswire-FirstCall/ -- Seagate
Technology (Nasdaq:   STX) today announced an update to its expected financial
results for its fourth fiscal quarter of 2009, which ends July 3, 2009.
Additionally, the Company issued initial planning assumptions for its first
fiscal quarter of 2010, which ends on October 2, 2009.
    

    Specific to the June 2009 quarter:
    --  Unit demand and pricing for the Company's products, in aggregate, are
        tracking favorably as compared to the outlook the Company provided on
        April 21, 2009
    --  Improved operational efficiencies, product management and the
        continuing successful transition to the Company's new products, which
        is allowing the Company to optimize product mix and gross margin
    --  Company and industry channel inventory continue to be below historic
        levels
    --  As such, the Company now expects:
        --  The total available market (the "TAM") for hard disk drives to be
            approximately 120 million units, or slightly higher, versus our
            original assumption of 114 million units
        --  Revenue of approximately $2.20 - $2.30 billion
        --  Gross margin as a percent of revenue of approximately 15%

        --  Product Development, Marketing and Administrative costs are
            expected to be $335 million


    
    Relative to the September 2009 quarter, the Company for planning purposes
is assuming:
    
    --  The overall TAM for hard disk drives is expected to increase
seasonally
        by approximately 6% to 8% with the exception of the enterprise market
        which will be flat compared to the June quarter
    --  Supply and demand will be in relative balance, therefore price
declines
        will be similar in nature to the June quarter
    --  As such, the Company is planning for:
        --  Revenue of approximately $2.35 - $2.50 billion
        --  Gross Margin as a percent of revenue will improve to approximately
            18%, which is ahead of plan due to improved operational
            efficiencies and product management, and reaches the low end of
the
            Company's targeted range of 18% - 24%
        --  Product Development, Marketing and Administrative costs will be
            $315 million

        --  Tax provision of approximately 6%


    
    "The operational and financial performance improvements we have delivered
over the last few months are encouraging," said Steve Luczo, Seagate chief
executive officer. "We are making successful transitions to our newer, more
cost effective and more competitive products. We are returning to our
technology leadership position, as evidenced by our time-to-market position
with 640GB 2.5-inch and 2TB 3.5-inch products. This progress combined with
improved operational efficiencies and product management is accelerating our
path to profitability."
    

    About Seagate
    
    Seagate is the worldwide leader in hard disk drives and storage
solutions. Learn more at seagate.com.
    

    Cautionary Note Regarding Forward-Looking Statements
    
    This press release contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. These forward-looking
statements include, but are not limited to, statements related to the
Company's preliminary results for the June 2009 quarter and its future
operating and financial performance in the September 2009 quarter, and
thereafter, and include statements regarding expected revenue, gross margin,
inventory levels, product competition, customer demand for disk drives,
product transitions, the Company's ability to return to profitability,
effective tax rates and general market conditions. These forward-looking
statements are based on information available to Seagate as of the date of
this press release. Current expectations, forecasts and assumptions involve a
number of risks, uncertainties, and other factors that could cause actual
results to differ materially from those anticipated by these forward-looking
statements. Such risks, uncertainties, and other factors may be beyond the
Company's control. In particular, the decline in global economic conditions
continues to pose a risk to the Company's operating and financial performance
as consumers and businesses have, and may continue to, defer purchases in
response to tighter credit and negative financial news. Such risks and
uncertainties also include the impact of the variable demand and the
aggressive pricing environment for disk drives, particularly in view of
current business and economic conditions; dependence on Seagate's ability to
successfully qualify, manufacture and sell its disk drive products in
increasing volumes on a cost-effective basis and with acceptable quality,
particularly the new disk drive products with lower cost structures; the
impact of competitive product announcements and possible excess industry
supply with respect to particular disk drive products; our ability to achieve
projected cost savings in connection with our anticipated and announced
restructuring plans; and the impact of changes in foreign and domestic tax
regulations. Information concerning risks, uncertainties and other factors
that could cause results to differ materially from those projected in the
forward-looking statements is contained in the Company's Annual Report on Form
10-K as filed with the U.S. Securities and Exchange Commission on August 13,
2008, and in the Company's Quarterly Report on Form 10-Q as filed with the
U.S. Securities and Exchange Commission on May 6, 2009, which statements are
incorporated into this press release by reference. These forward-looking
statements should not be relied upon as representing the Company's views as of
any subsequent date and Seagate undertakes no obligation to update
forward-looking statements to reflect events or circumstances after the date
they were made.
    



    




For further information:

For further information: Media, Brian Ziel, +1-831-439-5429,
brian.ziel@seagate.com, or Investors, Rod Cooper, +1-831-439-2371,
rod.j.cooper@seagate.com, both of Seagate Web Site: http://www.seagate.com

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