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Seagate belches, chomps down another greenback burger

Storage biz's margins slowly but steadily embiggen

Seagate’s second quarter revenues for 2015 rose 4.8 per cent over the year to $3.7bn while profits more than doubled to $933m, up from $428m a year ago.

Last quarter’s revenues were higher, at $3.8bn, yet profits were $381m. This meant they made up just 10.1 per cent of its revenues compared to 25.2 per cent profit in the latest quarter, which finished on January 2.

The quarterly revenue number undershot Wall Street expectations of $3.74bn; the undershoot might be due to lower PC sales in the quarter.

The ASP (average selling price) per drive declined to $61, down from $62 a year ago, although capacity shipped grew 17 per cent to 61.3 exabytes, with the average drive capacity being 1.077TB.

We calculate that Seagate shipped 56.9 million drives in the quarter. It was 59.8 million a year ago and 59.5 million in the first quarter of FY2015, meaning a sequential drop.

Seagate also booked $630m from an arbitration award against Western Digital relating to disk read/write head trade secrets theft which stemmed from a hire made back in 2006; possibly the most expensive mis-hiring in the history of the storage industry.

All-in-all, the award-boosted profit flattered Seagate’s performance in the quarter. ®

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