Tuesday, January 31, 2012 4:36:59 PM
Seagate Technology Inc.'s (STX) fiscal second-quarter earnings soared as the
maker of hard drives reported sharply stronger margins and revenue increased.
While the hard-disk drive industry was hurt by severe flooding in Thailand,
the facilities of Seagate remained intact, giving the company an advantage over
rival Western Digital Corp. (WDC) and allowing it to benefit from higher
pricing and longer-term contracts with customers. The company has said it
expects stable prices this year as demand for hard drives outstrips supply. The
company acquired Samsung Electronics Co.'s (SSNHY, 005930.SE) hard drive
business in December.
Last week, Western Digital reported its fiscal second-quarter earnings fell
36% as revenue and shipments fell, though the company said it has made
"significant" progress restoring its manufacturing capacity following flooding
in Thailand.
For the quarter ended Dec. 30, Seagate reported a profit of $563 million, or
$1.28 a share, up from $150 million, or 31 cents a share, a year earlier.
Excluding items such as acquisition-related charges and an income tax benefit,
adjusted earnings rose to $1.32 a share from 33 cents a share a year earlier.
Analysts polled by Thomson Reuters had expected earnings of $1.08 a share.
Revenue increased 18% to $3.2 billion, at the high-end of the company's
earlier guidance.
Gross margin widened to 31.6% from 19.5%. The company earlier this month had
predicted margins of at least 30.5%--well above its historical average of 22%
to 26%--due to higher prices.
Seagate shipped 47 million hard drives in the latest quarter, compared with
the 28.5 million drives Western Digital reported last week. The company has
previously said hard drive shipments were a little lighter than normal quarters
because of the flooding, though the company's supply chain was able to react
quickly to increase production more than initially anticipated.
Shares of Seagate slid 1.8% to $20.75 after hours. The stock is up 31% in the
past three months.
-By Nathalie Tadena, Dow Jones Newswires; 212-416-3287;
nathalie.tadena@dowjones.com
Seagate Technology Inc.'s (STX) fiscal second-quarter earnings soared as the
maker of hard drives reported sharply stronger margins and revenue increased.
While the hard-disk drive industry was hurt by severe flooding in Thailand,
the facilities of Seagate remained intact, giving the company an advantage over
rival Western Digital Corp. (WDC) and allowing it to benefit from higher
pricing and longer-term contracts with customers. The company has said it
expects stable prices this year as demand for hard drives outstrips supply. The
company acquired Samsung Electronics Co.'s (SSNHY, 005930.SE) hard drive
business in December.
Last week, Western Digital reported its fiscal second-quarter earnings fell
36% as revenue and shipments fell, though the company said it has made
"significant" progress restoring its manufacturing capacity following flooding
in Thailand.
For the quarter ended Dec. 30, Seagate reported a profit of $563 million, or
$1.28 a share, up from $150 million, or 31 cents a share, a year earlier.
Excluding items such as acquisition-related charges and an income tax benefit,
adjusted earnings rose to $1.32 a share from 33 cents a share a year earlier.
Analysts polled by Thomson Reuters had expected earnings of $1.08 a share.
Revenue increased 18% to $3.2 billion, at the high-end of the company's
earlier guidance.
Gross margin widened to 31.6% from 19.5%. The company earlier this month had
predicted margins of at least 30.5%--well above its historical average of 22%
to 26%--due to higher prices.
Seagate shipped 47 million hard drives in the latest quarter, compared with
the 28.5 million drives Western Digital reported last week. The company has
previously said hard drive shipments were a little lighter than normal quarters
because of the flooding, though the company's supply chain was able to react
quickly to increase production more than initially anticipated.
Shares of Seagate slid 1.8% to $20.75 after hours. The stock is up 31% in the
past three months.
-By Nathalie Tadena, Dow Jones Newswires; 212-416-3287;
nathalie.tadena@dowjones.comSeagate Technology Inc.'s (STX) fiscal second-quarter earnings soared as the
maker of hard drives reported sharply stronger margins and revenue increased.
While the hard-disk drive industry was hurt by severe flooding in Thailand,
the facilities of Seagate remained intact, giving the company an advantage over
rival Western Digital Corp. (WDC) and allowing it to benefit from higher
pricing and longer-term contracts with customers. The company has said it
expects stable prices this year as demand for hard drives outstrips supply. The
company acquired Samsung Electronics Co.'s (SSNHY, 005930.SE) hard drive
business in December.
Last week, Western Digital reported its fiscal second-quarter earnings fell
36% as revenue and shipments fell, though the company said it has made
"significant" progress restoring its manufacturing capacity following flooding
in Thailand.
For the quarter ended Dec. 30, Seagate reported a profit of $563 million, or
$1.28 a share, up from $150 million, or 31 cents a share, a year earlier.
Excluding items such as acquisition-related charges and an income tax benefit,
adjusted earnings rose to $1.32 a share from 33 cents a share a year earlier.
Analysts polled by Thomson Reuters had expected earnings of $1.08 a share.
Revenue increased 18% to $3.2 billion, at the high-end of the company's
earlier guidance.
Gross margin widened to 31.6% from 19.5%. The company earlier this month had
predicted margins of at least 30.5%--well above its historical average of 22%
to 26%--due to higher prices.
Seagate shipped 47 million hard drives in the latest quarter, compared with
the 28.5 million drives Western Digital reported last week. The company has
previously said hard drive shipments were a little lighter than normal quarters
because of the flooding, though the company's supply chain was able to react
quickly to increase production more than initially anticipated.
Shares of Seagate slid 1.8% to $20.75 after hours. The stock is up 31% in the
past three months.
-By Nathalie Tadena, Dow Jones Newswires; 212-416-3287;
nathalie.tadena@dowjones.com
(END) Dow Jones Newswires
January 31, 2012 16:32 ET (21:32 GMT)
Copyright (c) 2012 Dow Jones & Company, Inc.
013112 21:32 -- GMT
EVEN A BROKEN CLOCK IS RIGHT TWICE A DAY!
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