Seagate Reports Q3

SCOTTS VALLEY, Calif. -- Seagate Technology(NYSE:STX) today reported revenue of $2.8 billion, GAAP net income of $212million, and diluted net income per share of $0.37 for the quarter endedMarch 30, 2007. Net income and diluted net income per share includesapproximately $62 million of charges associated with recent acquisitions.Excluding these charges, non-GAAP net income and diluted net income pershare were $274 million and $0.47.

For the nine months ended March 30, 2007 Seagate reported revenue of $8.6billion, GAAP net income of $371 million and diluted net income per share of$0.62. Net income and diluted net income per share include charges ofapproximately $219 million associated with recent acquisitions and $19million for the early retirement of the 8% notes. Excluding these charges,non-GAAP net income and diluted net income per share were $609 million and$1.02.

"We are disappointed in our results for the March quarter," said BillWatkins, Seagate chief executive officer. "We clearly miscalculated themarket, and in this unusually challenging environment failed to deliver theprojected results. However, it is worth noting that the fundamentals of ourbusiness and that of the industry remain solid. Seagate's revenue remainedstrong, our balance sheet is healthy, and we continued to generate cash forongoing investments in the capital and R&D required for growth. We areoperating at the kind of scale that will allow us to continue to innovatewhile driving down costs, and thus exercise a great deal of marketflexibility. Moving forward, we will align spending with the currentoutlook, and continue to drive the cost improvements necessary to thrive inthis environment."

Adjustments made to GAAP net income and diluted net income per share can befound with the financial statements included with this press release.Additional information relating to the financial results for the thirdfiscal quarter of 2007 can be found online at seagate.com.

Business OutlookFor fiscal year 2007, Seagate now expects $11.3 - $11.4 billion in revenueand $0.92 - $0.96 GAAP diluted net income per share. Including Maxtor'soperating result but excluding approximately $247 million of expectedacquisition related costs, and $19 million of fees associated with the earlyredemption of the 8% notes, non-GAAP diluted net income per share isexpected to fall within the range of $1.37 - $1.41.

For the June quarter, Seagate expects to report revenue of $2.65 - $2.75billion, and GAAP diluted net income per share of $0.29 - $0.33. Excludingapproximately $28 million of expected acquisition related costs, Non-GAAPdiluted net income per share for the June quarter is expected to fall withinthe range of $0.34 - $0.38.

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

Seagate Technology Inc.