Feeds

CE drive demand pushes Seagate into the black

Q1 2005 sales beat expectations

  • alert
  • submit to reddit

Beginner's guide to SSL certificates

Hard drive manufacturer Seagate exceeded its expectations during the first quarter of its 2005 fiscal year, when it reported today Q1 revenues of $1.56bn, just above its $1.48-1.52bn forecast range.

Q1's revenue figure marks sales growth of 17.3 per cent over the previous quarter, which the company described at the time as "challenging" and led to the loss of 3000 jobs.

Q1 net income totalled $54m (11 cents a share), a big turnaround from Q4 2004's $33m loss, but nonetheless a long way off the $198m (40 cents a share) income Seagate posted in the year-ago quarter on sales of $1.74bn. The Q1 figure includes a $14m gain relating to "the discontinuation of certain benefits associated with Seagate's post-retirement medical plan". That also helped bump up gross margins from 17.1 per cent to 17.7 per cent sequentially.

During Q4 2004, Seagate was hit hard by weakening demand across the HDD industry for desktop and server products. Not so Q1 2005, which yielded "near record" unit shipments, the company said. Seagate shipped just over 21.6m drives, up 18 per cent on the 18.3m its shipped in the previous quarter and almost two per cent on the year-ago period.

Seagate saw unit shipments rise across its enterprise, desktop, notebook and consumer electronics product lines, but the last two saw the biggest sequential growth: 47.2 per cent and 51.6 per cent, respectively. Demand for Seagate's CE drives was boosted by its introduction of a 1in part, which has started cropping up in many of the latest mini digital music players.

Year on year, CE and mobile again showed the biggest growth - 29.9 per cent and 117 per cent, respectively. Those lines' unit shipment totals remain dwarfed by Seagate's desktop unit shipments, though these decline 6.7 per cent year on year. Enterprise drive shipments were up 17.1 per cent.

Looking ahead to Q2, which overlays calendar Q4, Seagate said it expects overall demand across the industry to grow for three of the four categories, CE being the exception. That market will stay flat. Seagate's Q4 2004 to Q1 2005 sequential growth rates are all well in excess of the anticipated increases in each segment's total available market, giving the company strong momentum going forward.

That said, Seagate still describes the market environment as "challenging", and said it will continue to seek to cut costs "which may result in additional restructuring activities and restructuring charges in the future" - an indication of potential further job losses.

Seagate expects Q2 revenue to fall somewhere between $1.58bn and $1.65 billion, and diluted earnings per share to be in the range of 11-14 cents, "excluding any restructuring charges", it added. ®

Related stories

Seagate ups Q1 estimates
Seagate sees red in Q4
Seagate seeks system builder support for 100GB notebook drive
Cornice countersues Seagate
Seagate targets rival with import ban demand
Seagate extends HDD warranties to five years
Seagate unveils 'tiny to terabyte' hard drives

Internet Security Threat Report 2014

More from The Register

next story
Bladerunner sequel might actually be good. Harrison Ford is in it
Go ahead, you're all clear, kid... Sorry, wrong film
Musicians sue UK.gov over 'zero pay' copyright fix
Everyone else in Europe compensates us - why can't you?
I'll be back (and forward): Hollywood's time travel tribulations
Quick, call the Time Cops to sort out this paradox!
Euro Parliament VOTES to BREAK UP GOOGLE. Er, OK then
It CANNA do it, captain.They DON'T have the POWER!
Megaupload overlord Kim Dotcom: The US HAS RADICALISED ME!
Now my lawyers have bailed 'cos I'm 'OFFICIALLY' BROKE
Forget Hillary, HP's ex CARLY FIORINA 'wants to be next US Prez'
Former CEO has political ambitions again, according to Washington DC sources
prev story

Whitepapers

Designing and building an open ITOA architecture
Learn about a new IT data taxonomy defined by the four data sources of IT visibility: wire, machine, agent, and synthetic data sets.
Getting started with customer-focused identity management
Learn why identity is a fundamental requirement to digital growth, and how without it there is no way to identify and engage customers in a meaningful way.
10 threats to successful enterprise endpoint backup
10 threats to a successful backup including issues with BYOD, slow backups and ineffective security.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
10 ways wire data helps conquer IT complexity
IT teams can automatically detect problems across the IT environment, spot data theft, select unique pieces of transaction payloads to send to a data source, and more.