Seagate Technology Reports Record Fiscal Third Quarter 2005 Results
biz.yahoo.com
Tuesday April 19, 4:05 pm ET
- Revenue Increases 42% to a Record $1.97 Billion, Net Income Grows 44% to a Record $229 Million, and Shipments Reach Record 24.9 Million UnitsCompany Expects Continued Strong Financial Performance in June Quarter and Throughout Calendar Year
SCOTTS VALLEY, Calif., April 19 /PRNewswire-FirstCall/ -- Seagate Technology today reported revenue of $1.97 billion, net income of $229 million, and diluted earnings per share of $0.45 for the quarter ended April 1, 2005. These results represent a 42% increase in revenue and a 44% increase in net income over the results from the year-ago quarter, and are an improvement from the guidance provided in the company's March 7th business update. Income from operations for this quarter grew to $237 million compared to $53 million in the year-ago quarter.
"Disc drives are a central, enabling technology for the digital convergence that is driving the electronics industry, and the disc drive industry is experiencing strong revenue growth as a result," said Bill Watkins, Seagate's president and CEO. "Seagate's strong sequential and year-over-year performance is a direct result of our unique ability to deliver the technology leadership, product leadership and cost leadership, helping to fuel the tremendous growth in consumer electronics applications and expanding the capabilities of traditional computing applications. Our broad product line is producing consistently strong results, countering even the seasonally weak periods in the disc drive industry, such as the March quarter. And moving forward, we are confident that Seagate will maintain strong revenue and earnings in the June quarter, which is then followed by what we expect to be a seasonally strong second half of calendar 2005."
Consumer Electronics Products
Seagate maintained its leadership position in the consumer electronics market, the fastest growing segment in the disc drive industry. The company shipped a total of 4.2 million drives in the March quarter for handheld, gaming and DVR applications, an increase of 296% from the year-ago quarter and an increase of 24% quarter-over-quarter. Strong customer adoption of ST1, the industry's highest capacity and most widely used 1-inch drive, continued during the quarter, resulting in shipments of 1.9 million units, a 30% increase quarter-over-quarter. During the quarter, Seagate began volume shipments of its 3-disc 400GB DB35 drive designed for capacity-intensive applications such as video on-demand, high-definition television recording and home media centers.
Mobile Computing Products
The March quarter marked Seagate's third consecutive quarter of share growth in the mobile computing space as unit shipments climbed to 1.8 million units, an 85% increase from the year-ago quarter and a 44% increase from the December quarter. During the quarter, the company began volume shipments of its leading 5400RPM 100GB 2.5-inch disc drive for internal and external storage applications. The company has once again extended its technology leadership in this space with yesterday's announcement of the industry's first 5400RPM 120GB and 7200RPM 100GB notebook drives.
Enterprise Products
Seagate, for the second consecutive quarter, delivered a record number of enterprise drives as industry demand in this space reached record levels. Seagate shipped 3.4 million units, maintaining its leadership position in this space and growing shipments 38% year-over-year.
Desktop Products
In a seasonally down quarter, Seagate continued to lead the market with shipments of 15.5 million units. Seagate experienced strong demand for its products throughout the quarter in all channels and exited the quarter with less than 4 weeks of distribution channel inventory. Unit shipments of its Barracuda disc drives at capacities of 200GB and greater increased 43% sequentially, propelled by the introduction of its 3-disc, 400GB drive.
Pricing
The average selling price for all Seagate products, on a blended basis, increased almost three dollars over the December quarter. Price erosion on a "like for like" product basis during the March quarter was favorable to the historical norms, but slightly greater than the December quarter.
Business Outlook
Seagate is confident that, with the ongoing customer adoption of its extensive product portfolio, new revenue opportunities and solid operational execution, it is very well positioned to continue its strong financial performance during the June quarter, which is typically the slowest quarter of the year. As a result, the company expects June quarter revenue and earnings to be comparable to the March quarter results. Looking beyond the June quarter, the industry enters the seasonally stronger half of the year which under today's environment would translate into growth in revenue and earnings from the levels of the March and June quarters. Seagate will provide a business update during the week of June 6, 2005. |
