Feeds

Disk demand after Thai floods drains away - unlike Seagate's coffers

Not buying OCZ despite money mountain

Website security in corporate America

Seagate may not have done as well as it had hoped to do in its latest quarter, which was down on the previous three months, but its $1bn earnings are still much, much better than a year ago.

The disk drive dealer also defied industry speculation by failing to announce an OCZ acquisition. But it did say it could buy an SSD supplier.

Western Digital's revenues were higher, of course, but Seagate is still the disk drive industry leader on an annual revenue basis. Seagate has a new SSD is coming, co-developed with Samsung, and more hybrid drives will appear.

Bulked up by the acquired Samsung disk drive business, revenues for its fourth financial 2012 quarter were $4.48bn, the reset figure it advised a three weeks ago, down from the originally expected $5bn, but a full 57 per cent higher than a year ago. They increased just 1.9 per cent from the third quarter though, as demand from the Thai flooding episode died away.

Seagate's fourth 2012 quarter

Profits were $1.013bn, an astonishing 751 per cent higher than a year ago, when Seagate was in a slough of profits despond. The profit was 8 per cent lower than the previous quarter as Seagate had an enterprise drive quality problem that had to be worked through. This was caused by "a particle contaminant coming from a supplier 3 levels down in the supply chain," and took some finding. The supplier was replaced and 1.5 million drive shipments were lost.

Drive shipments were 66 million, a 42 per cent share of the market, which compares to WD's 71 million in its latest quarter. WD's revenues were $4.8bn and its profit $745m, so it whupped Seagate in revenues and unit ships but not earnings for the quarter. Seagate really did make some bucks from the Thai flood drive shortages that affected WD in previous quarters. Whether it can sustain that level of profitability is doubtful.

Seagate's full financial 2012 revenues were $14.939bn with profits of $2.86bn. Last year's figures were $10.97bn and $511m respectively. WD's fy 2012 revenues were $12.48bn with profits of $1.61bn. On an annual revenue and profits basis, Seagate is still the hard disk drive industry leader.

OCZ

There had been speculation that Seagate would announce the acquisition of flash solid state storage vendor OCZ, but – sadly for OCZ stockholders – it did not. It did announce the appointment of Gary Gently as the SVP and general manager in charge of its SSD business however. Gentry joins from Micron where he was the general manager of its enterprise SSD business, and he worked at Seagate previously.

Reuters reports CFO Pat O'Malley as saying Seagate could buy an enterprise SSD supplier with a good share of the market... STEC maybe? He's quoted thus: "We look at all technology product providers [for mergers and acquisitions] but what I would say is that on the enterprise SSDs, there's probably only one of them that really makes any significant money."

He didn't identify it and wouldn't discuss OCZ specifically.

Road map

In Seagate's earnings call, CEO Steve Luczo said a new flash drive was coming: "Our technology partnership with Samsung has progressed on plan and has resulted in a highly competitive Tier 0 product. We expect to be shipping customer test units of this product at the end of this quarter."

A third-generation hybrid drive, a notebook-class disk drive with on-board flash cache, will appear in the autumn, sand an enterprise hybrid drive will start demonstration unit shipment later in the year. A few OEMs have asked for exclusivity with some of these hybrid products.

Luczo also mentioned the DensBits SSD controller technology acquisition: "We are also jointly developing a next-generation solid state controller technology with DensBits that’s focused on breaking through current cost, reliability and performance benchmarks in the client and enterprise markets."

Regarding Seagate's solid state strategy, Luczo said: "We are confident in our approach to these markets, where we leverage our customer relationships and technical capabilities and focus on building core technology with strategic partners to produce best-in-class devices and solutions."

That doesn't sound like he's intent on flash company acquisitions.

The outlook for the next quarter is not impressive, with revenues down to $4bn on the assumption of flat demand and a continued improvement in the average capacity of shipped drives. It's all down to the economy and decelerating PC sales, says Seagate. ®

Reducing the cost and complexity of web vulnerability management

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
Apple CEO Tim Cook: TV is TERRIBLE and stuck in the 1970s
The iKing thinks telly is far too fiddly and ugly – basically, iTunes
Israeli spies rebel over mass-snooping on innocent Palestinians
'Disciplinary treatment will be sharp and clear' vow spy-chiefs
Huawei ditches new Windows Phone mobe plans, blames poor sales
Giganto mobe firm slams door shut on Microsoft. OH DEAR
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Found inside ISIS terror chap's laptop: CELINE DION tunes
REPORT: Stash of terrorist material found in Syria Dell box
OECD lashes out at tax avoiding globocorps' location-flipping antics
You hear that, Amazon, Google, Microsoft et al?
Show us your Five-Eyes SECRETS says Privacy International
Refusal to disclose GCHQ canteen menus and prices triggers Euro Human Rights Court action
prev story

Whitepapers

Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.
Security and trust: The backbone of doing business over the internet
Explores the current state of website security and the contributions Symantec is making to help organizations protect critical data and build trust with customers.
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.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.