Yesterday Seagate announced disappointing financial results, the company failed to meet expectations with a net income of $1.06 billion on revenue of $4.48 billion. One of the interesting things said during the conference call was a statement that the company is interested in buying a SSD maker that has a significant share of the enterprise market, thereby confirming last week's rumors that Seagate is looking into buying OCZ.
After the market closed on Monday, Seagate announced that the company missed market expectations. Revenue for the fiscal fourth quarter 2012 (ended June 30th, 2012) reached $4.48 billion with a net income of $1.06 billion. However, investors punished the stock, dropping it down by almost 8% in after hours trading. For the whole fiscal year 2012, the company reported record revenue of almost $15 billion, 27% higher than in the year before (before the acquisition of Samsung's hard drive business). Those $14.94 billion in revenue were enough to report an annual net income of $3.11 billion or $6.72 EPS (Earnings Per Share). The company's assets in cash and cash equivalents reduced from $2.67 to $1.71 billion, while the company still has $2.86 billion in long term debt.
As such, we expected an interesting conference call and one of first things that we noticed was that Kenneth Massaroni, Executive VP, General Counsel and Chief Administrative Officer (CAO) was missing from the call. While most of analysts were tip-toeing around the issue of whether or not the company will acquire OCZ Technology, the question finally came up. According to Reuters, on that direct question Chief Financial Officer Pat O'Malley stated that Seagate Technology "would be interested in buying an SSD maker that has a "significant" share of the enterprise market." Furthermore, Pat stated that "We don't do any comments on official policy on M&A until it's done," ending the discussion about the upcoming acquisition of a strong player in the booming Solid State market.