GM, Stitch, all,
Just listened to the CC. There is a pretty good summary on the other SEG thread, courtesy of DJones reporter. A few additional notes:
revenue breakdown: $775m desktop, up 24%, $846m high end, up 11%; $92m software, of which $59m is in division to go to VRTS; $75m tape, up 10%;
all business segments had improved margins, though pricing still competitive everywhere; clearly less than in previous quarters, though
demand remains strong, including last couple of weeks in Dec (it typically gets weaker then--suggests strongly that SEG isn't alone in keeping inventory, capacity build under control; also that people finally want to make some money, not just build market share)
they set a quarterly record for unit shipments at 8.3m
geographic breakdown: North Amer--46% (down from 50%), Europe 39% (up from 35%), Asia flat at 15%; Europe remains very strong;
U2 (sub1000 drive)--qualified at 6 top OEM, very pleased with its progress, will have a new generation this Q
Keystone--4.3 program, shipped in vlm in Dec., next generation to come in this Q, fast ramp;
50gig Barracuda drive to ship this Q
VRTS deal to close this Q, they are assuming a $65 VRTS stock price at closing, may differ, but if so, then they will have a $1.25b pretax gain plus $1.1b goodwill to amortize over next 3-5 years; will sell some VRTS stock to pay for latter
cost reduction program still in design stage, GM improvements came even without it kicking in; will kick in next FY; look forward to when it kicks in, and when they become the time to market leaders, have narrowed the gap, but still plenty of room for improvement
GMR to begin this FY, but will mostly be a FY00 phenomenon (but isn't WDC, IBM shipping these next month?)
they don't use TSA, will use flex for at least this and next generation drives, are continually evaluating alternatives
greater than 50% growth in Cheetah, FC growth at 13%, will see improvement this quarter in FC as they qual at more OEMs; clain to be the sole supplier of FC drives (is this true still?)
heads--14% external source, media 19% (not sure if I got that one right--SL was talking pretty fast)
Dragon--will hold the stock, very "excited" by its prospects will hold 38% of company (I thought it was 35%, would have thought that that % would shrink after offering, unless they buy some more--will be a hot IPO, I would guess)
LTO--will be in "selected" customers in mid99, but will go slowly. will take anywhere from several quarters to several years to get to volume shipments. They sounded pretty cautious about it, more upbeat about their low end tape pdts
5gig platter drive in Sept. (Durango)
every questioner (the usual suspects) congratulated them on a great quarter (though they are probably somewhat nonplussed about having their estimates be so far off) |
