Market Uncertainties Help Seagate to Boost Revenue amid Lower Shipments

Seagate Ups Estimations for Fourth Quarter Shipments, Revenues

by Anton Shilov
01/04/2012 | 11:52 PM

Seagate Technology has updated its own financial outlook for the Q3 of FY2012 (calendar Q4 2011). Thanks to improved manufacturing capabilities, the company managed to beat both its revenue and shipments forecasts, partly due to acquisition of Samsung Electronics' hard drive business late in calendar 2011. Moreover, despite of lower unit shipments, Seagate will report higher revenue than for the same period a year ago.

 

“The better than expected results for the December quarter are attributed to the company’s outstanding operational performance and overall strong execution,” said Steve Luczo, Seagate chief exec and chairman.

The company shipped approximately 47 million disk drives, which included approximately 700 thousand Samsung disk drives, and expects to report revenue for its fiscal second quarter fiscal 2012 of $3.1 - $3.2 billion. Back in November, 2011, Seagate expected unit shipments of approximately 43 million units and revenue of approximately $2.8 billion.

Seagate's component and disk drive factories in Thailand have not been directly affected by the flood in the country in October; however, the company’s ability to manufacture hard disk drives has been impacted due to external component supply constraints. Nonetheless, the company demonstrated moderate drop in Q4 2011's hard drive shipments compared to Q4 2010 - only 3.1% in terms of units - amid major growth of revenue. Back in Q2 of its FY2011, it shipped 48.9 million disk drives and on a GAAP basis reported revenue of $2.7 billion. Market uncertainties allowed Seagate to enjoy $500 million in additional revenue during the quarter.

“Due to our best-in-class operations, diversified supply-chain and differentiated manufacturing footprint, we continuously optimized our builds for customers during the quarter. This is best evidenced by our company’s ability to increase the average capacity per drive shipped quarter-over-quarter to a record 653 gigabytes, despite the significant supply chain disruption. These results also reflect the hard work and resiliency of the Seagate teams and our strategic suppliers who are working to help the industry recover from the massive disruption caused by the flooding in Thailand,” added Mr. Luczo.