Seagate Reports HDD Markets First $3B Quarter

By Chris Preimesberger  |  Posted 2007-01-23 Print this article Print

The disk drive maker smashes earnings records after its most successful quarter ever, with earnings up 30 percent over 2005.

Seagate Technology, the worlds number one revenue producer in the hard disk drive market, announced on Jan. 23 the industrys first $3 billion quarter alongside whopping revenue growth of 30 percent over a year ago.

The Scotts Valley, Calif.-based company also reported GAAP net income of $140 million and diluted earnings per share of $0.23 for the quarter ending Dec. 29, 2006. Included in the $3 billion revenue is approximately $200 million from legacy Maxtor designed products, a company spokesperson said.
Net income and diluted earnings per share includes approximately $76 million of charges directly associated with the acquisition of former competitor Maxtor in May, 2006 for $1.9 billion, and $19 million for the early retirement of the 8 percent notes.
Excluding these charges, non-GAAP net income and diluted earnings per share were $236 million and $0.39. "These results are driven by the explosive growth in digital content and the resulting growth in demand for storage, as well as by our ability to deliver a broadening suite of products to a growing set of customers," CEO Bill Watkins told a conference call audience. The solid quarter reflects better-than expected desktop pricing, the successful transition of Maxtor customers to more cost-effective, higher margin Seagate products, and continued operational excellence, Watkins said. "With the Maxtor integration substantially complete and exciting new products hitting the market in the current quarter, Seagate is on a path to further increase profitability in the traditionally slower back half of the fiscal year," Watkins said. Click here to read more about how Seagate is building on its Maxtor acquisition. During the last quarter, Seagate shipped a record 7 million disk drives for consumer electronics applications, increased its shipments into the mobile compute market by 52 percent year-over-year, and continued to solidify its lead in the enterprise and desktop markets. Additional highlights of the quarter, Watkins said, include the start of OEM qualification of Seagates 1.8-inch products; the successful launch of the re-branded Seagate and Maxtor external storage products—which included four new Seagate external storage packages—and the expansion of Seagates services business with the announced acquisition of EVault. For more details on the earning report, go here. Check out eWEEK.coms for the latest news, reviews and analysis on enterprise and small business storage hardware and software.
Chris Preimesberger Chris Preimesberger was named Editor-in-Chief of Features & Analysis at eWEEK in November 2011. Previously he served eWEEK as Senior Writer, covering a range of IT sectors that include data center systems, cloud computing, storage, virtualization, green IT, e-discovery and IT governance. His blog, Storage Station, is considered a go-to information source. Chris won a national Folio Award for magazine writing in November 2011 for a cover story on and CEO-founder Marc Benioff, and he has served as a judge for the SIIA Codie Awards since 2005. In previous IT journalism, Chris was a founding editor of both IT Manager's Journal and and was managing editor of Software Development magazine. His diverse resume also includes: sportswriter for the Los Angeles Daily News, covering NCAA and NBA basketball, television critic for the Palo Alto Times Tribune, and Sports Information Director at Stanford University. He has served as a correspondent for The Associated Press, covering Stanford and NCAA tournament basketball, since 1983. He has covered a number of major events, including the 1984 Democratic National Convention, a Presidential press conference at the White House in 1993, the Emmy Awards (three times), two Rose Bowls, the Fiesta Bowl, several NCAA men's and women's basketball tournaments, a Formula One Grand Prix auto race, a heavyweight boxing championship bout (Ali vs. Spinks, 1978), and the 1985 Super Bowl. A 1975 graduate of Pepperdine University in Malibu, Calif., Chris has won more than a dozen regional and national awards for his work. He and his wife, Rebecca, have four children and reside in Redwood City, Calif.Follow on Twitter: editingwhiz

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