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The first quarter of 2011 did not bring any surprises on the market of hard disk drives. Western Digital shipped the highest amount of HDDs on the planet, but Seagate Technology maintained its leadership in terms of revenues. Still, thanks to better cost structure, WD was more profitable than its arch rival.

During the third quarter of fiscal 2011 (which is calendar Q1 2011 for both companies), WD's hard drive unit shipments reached 50 million, whereas Seagate supplied 49 million of HDDs. In the same period in calendar 2010, Western Digital sold 51.1 million of hard drives, while Seagate shipped 50.3 million HDD units. As it can be observed, in calendar first quarter Seagate managed to boost unit sales of its drives, whereas WD's shipments shrank.

WD blamed tragic events in Japan and disruption with microprocessor shipments by Intel for its reduced unit sales.

"The March quarter in the hard drive industry was impacted by two significant developments-the delayed supply of industry CPUs to PC makers and the tragic events in Japan. While demand for hard drives in the quarter got off to a slow start, it later picked up as availability of CPUs improved and as fears took hold of component shortages related to the events in Japan," said John Coyne, president and chief executive officer of WD.

For the Q3 FY2011 WD reported revenue of $2.25 billion and net income of $146 million, or $0.62 per share. The company's results include expenses of $10 million associated with the planned acquisition of Hitachi Global Storage Technologies announced in March. A year ago Western Digital reported revenue of $2.6 billion and net income of $400 million, or $1.71 per share, for its Q3 FY2010.

Seagate Technology reported revenue of $2.7 billion, gross margin of 19.1%, net income of $93 million and diluted earnings per share of $0.21. For the same period last year Seagate reported revenue of $3.05 billion, gross margin of 29.6%, net income of $518 million and diluted earnings per share of $1.00.

The hard disk drive industry in the first quarter of calendar 2011 clearly was substantially weaker than a year ago. Indirectly, this fact is also confirmed by WD's plans to acquire Hitachi GST and Seagate's intention to buy Samsung's HDD business.

Tags: Western Digital, WD, Seagate, HDD, Business

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