STOCKREPORTS		 Seagate Technology, Inc. NYSE Symbol SEG
In S&P 500
21-JUN-97 Industry:
Computers (Peripherals)		 Summary: Seagate is a leading maker of rigid magnetic disk drives for a wide range of computers from PCs to supercomputers. It also makes disk drive parts and other storage products.

Recent Price 36.50
52 Wk Range 51.75 - 20.56		 Yield Nil
12-Mo. P/E 12.1

Quantitative Evaluation:
Outlook (1 Lowest - 5 Highest)
4-
Fair Value
47.70
Risk
HIGH
Earn/Div Rank
B
Technical Evaluation:
BEARISH since 12/96
Rel. Strength Rank (1 Lowest - 99 Highest)
5
Insider Activity
NA

Overview 09-APR-97

Sales should rise about 20% in the fourth quarter of FY 97 and for all of FY 98, reflecting a higher level of unit shipments, aided by strong demand in general for disk drives and strong product positioning in the desktop and high performance drive market, aided by new products. Seagate is well positioned at the high end of the disk drive market, and should benefit from a move to higher capacity drives, stemming from the greater storage requirements of enhanced graphics, video, sound and computer networks. Margins should widen, on volume efficiencies, manufacturing cost reductions, moderated price declines, and a more favorable disk drive product mix, as well as increased contributions from software offerings. Per share earnings comparisons should also benefit from the absence of $1.14 (as adjusted) in charges recorded in the third quarter and $0.10 (adjusted) in charges recorded in the fourth quarter of FY 96.

Valuation 09-APR-97

The shares of this highly regarded storage vendor have rebounded sharply from their mid-1996 lows, on solid financial results and underlying expansion of the storage market. The introduction of new products as well as strong demand and moderated price competition should drive revenue and earnings growth through FY 98 (Jun.). SEG remains well positioned, particularly in the high capacity/high performance (and higher margin) segment of the market. Strong relationships with major OEMs, together with a proven ability to manage product cycles, bode well for continued operating success. The shares, which trade at about 13 times our estimated FY 98 earnings, are expected to outperform the market in coming months.

Key Stock Statistics

S&P EPS Est. 1997 3.60
P/E on S&P Est. 1997 10.1
S&P EPS Est. 1998 4.30
Dividend Rate/Share Nil
Shs. outstg. (M) 245.2
Avg. daily vol. (M) 5.709
Tang. Bk. Value/Share 10.27
Beta 1.84
Shareholders 6,000
Market cap. (B) $ 9.0
Inst. holdings 81%
Value of $10,000 invested 5 years ago:$ 80,000

Fiscal Year Ending Jun. 30

Revenue (Million $)
1997 1996 1995 1994 1993 1992
Q1 2,061 2,141 933.2 773.9 742.6 620.0
Q2 2,400 2,340 1,130 815.9 776.7 695.0
Q3 2,502 2,093 1,185 909.3 754.1 780.0
Q4 NA 2,015 1,292 1,001 770.2 780.0
Year NA 8,588 4,540 3,500 3,044 2,875

Earning Per Share ($)
1997 1996 1995 1994 1993 1992
Q1 0.59 0.61 0.15 0.25 0.43 -0.36
Q2 0.91 0.74 0.54 0.29 0.46 0.08
Q3 1.01 -0.79 0.49 0.46 0.28 0.29
Q4 E1.09 0.46 0.60 0.54 0.24 0.42
Year E3.60 1.03 1.76 1.54 1.40 0.46

Dividend Data
Amount ($) Date Decl. Ex-Div. Date Stock of Record Payment Date
2-for-1 Oct. 24 Nov. 27 Nov. 11 Nov. 26 '96

Business Summary 09-APR-97

None other than the current chairman of the NYSE called Seagate Technology a "blue chip" company last fall. While Seagate is not normally associated with "chips" (disk drives are its strong suit), the compliment from the Big Board's boss is testimony to SEG's market leading positions in revenues, profits, gross margin, operating margin, research and development, and capital investment.

The largest independent provider of mass storage products for computers and related equipment, Seagate's core business is in disk drives. Seagate is the most diversified of the disk drive vendors, offering more than 50 drive models with form factors (a measure of the disk size accommodated) of 2.5, 3.5 and 5.25 inches, and capacities ranging from 540 megabytes to 23 gigabytes. Products are differentiated by form factor and on a price/performance basis.

The company pursues a strategy of vertical integration, meaning it makes many of the component parts for its drives itself. Seagate is a major designer and manufacturer of major disk drive components, including thin film and magnetoresistive recording heads, head stack assemblies, media and motors.

Pricing has always been an issue in the disk drive industry. Prices for the same capacity class of disk drives trend only one way -- down. However, higher unit sales owing to industry consolidation, strong demand and increased manufacturing capability, combined with an improving product mix of higher capacity drives and continued manufacturing cost reductions, have benefitted Seagate's earnings in recent periods.

In addition to its core disk drive business, SEG continues to broaden its strategy to more fully address the markets for the storage, retrieval and management of data. Seagate offers a complete line of mini-cartridge and DAT tape drive products used primarily for system backup purposes. Through its fast growing Seagate Software unit, SEG also provides storage management and information management software solutions. Also, Seagate sells flash memory products.

The company has strong relationships with its customers, primarily major original equipment manufacturers (OEMs), and has proven itself able to manage the industry's increasingly short product cycles.

Capital expenditures, seen at around $850 million in FY 97, are expected to exceed $1 billion in FY 98.

Non-recurring charges in FY 96 (Jun.) were as follows: $42.4 million ($0.10 a share; as adjusted ) in the fourth quarter; and $314.1 million ($1.14; adjusted) in the third quarter. Non-recurring charges in FY 95 were: $15.0 million ($0.11 a share; adjusted) in the fourth quarter; $12.8 million ($0.10; adjusted) in the third quarter; and $43.0 million ($0.31; adjusted) in the first quarter. The charges were taken mainly for asset writedowns and restructuring costs related to acquisitions.

Capitalization

Long Term Debt: $701,916 (3/97).

Per Share Data ($)
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
Tangible Bk. Val. 10.27 9.40 9.12 7.67 6.31 5.88 5.32 4.43 4.44 3.68
Cash Flow 3.04 3.03 2.48 2.51 1.68 1.52 1.92 0.77 1.27 1.68
Earnings 1.03 1.76 1.54 1.40 0.46 0.47 0.96 0.00 0.77 1.40
Dividends Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil
Payout Ratio Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil
Prices - High 42 3/4 27 3/8 14 3/8 12 5/8 11 1/4 10 9 7/8 8 1/8 11 3/4 22 7/8
- Low 18 1/8 11 7/8 9 3/8 6 5/8 4 1/2 3 5/8 2 7/8 4 1/4 3 1/4 4 7/8
P/E Ratio - High 42 16 9 9 24 21 10 NM 15 16
- Low 18 7 6 5 10 8 3 NM 4 3

Income Statement Analysis (Million $)
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
Revs. 8,588 4,540 3,500 3,044 2,875 2,677 2,413 1,372 1,266 958
Oper. Inc. 1,044 630 449 439 309 256 297 91.0 151 208
Depr. 417 187 138 155 169 138 118 78.0 50.0 28.0
Int. Exp. 55.8 33.0 26.3 23.5 34.0 42.5 48.7 24.1 21.9 5.1
Pretax Inc. 331 409 322 271 85.0 82.0 150 NM 99 186
Eff. Tax Rate 36% 37% 30% 28% 26% 23% 22% 26% 22% 25%
Net Inc. 213 260 225 195 63.0 63.0 117 NM 77.0 140

Balance Sheet & Other Fin. Data (Million $)
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
Cash 1,174 1,247 1,334 629 504 252 263 190 93.0 396
Curr. Assets 3,399 2,445 2,246 1,471 1,259 1,184 1,139 652 685 647
Total Assets 5,240 3,361 2,878 2,031 1,817 1,880 1,851 1,077 1,094 814
Curr. Liab. 1,438 910 703 544 502 591 550 265 288 109
LT Debt 798 540 549 281 321 393 510 305 304 302
Common Eqty. 2,466 1,542 1,328 1,045 862 766 675 442 436 354
Total Cap. 3,616 2,326 2,097 1,450 1,280 1,254 1,269 812 806 705
Cap. Exp. 907 353 198 174 82.0 99 58.0 63.0 208 65.0
Cash Flow 630 447 363 350 232 201 235 78.0 128 167

Curr. Ratio 2.4 2.7 3.2 2.7 2.5 2.0 2.1 2.5 2.4 6.0
% LT Debt of Cap. 22.1 23.2 26.2 19.4 25.0 31.4 40.2 37.6 37.8 42.8
% Net Inc.of Revs. 2.5 5.7 6.4 6.4 2.2 2.3 4.9 NM 6.1 14.6
% Ret. on Assets 4.2 8.4 8.9 10.2 3.3 3.3 7.3 NM 8.0 24.8
% Ret. on Equity 9.7 18.2 18.4 20.5 7.6 8.6 19.0 0.1 19.4 49.4

Data as orig. reptd.; bef. results of disc. opers. and/or spec. items. Per share data adj. for stk. divs. as of ex-div. date. E-Estimated. NA-Not Available. NM-Not Meaningful. NR-Not Ranked.

Office--920 Disc Drive, Scotts Valley, CA 95066. Tel--(408) 438-6550. Website--http://www.seagate.com Chrmn, Pres, CEO & COO--A. F. Shugart. SVP-Fin, CFO & Secy--D. L. Waite. Investor Contact--Deborah Peterson. Dirs--G. B. Filler, K. E. Haughton, R. A. Kleist, L. Perlman, A. F. Shugart, T. P. Stafford, L. L. Wilkening. Transfer Agent & Registrar--Harris Trust Co of California. Incorporated--in California in 1978; reincorporated in Delaware in 1986. Empl-- 101,000. S&P Analyst: Peter C. Wood, CFA


This report is for information purposes and should not be considered a solicitation to buy or sell any security. Neither S&P nor any other party guarantee its accuracy or make warranties regarding results from its usage. Redistribution is prohibited without written permission. Copyright © 1997