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Technology Stocks : Disk Drive Sector Discussion Forum -- Ignore unavailable to you. Want to Upgrade?

To: Sam who wrote (7767)	1/11/2000 8:04:00 PM
From: Stitch	Read Replies (1) \| Respond to of 9256

Seagate Summary: Tuesday January 11 6:18 PM ET Seagate Profit Before Charges Beats Forecast PALO ALTO, Calif. (Reuters) - Seagate Technology Inc. (NYSE:SEG - news), the largest maker of computer-disk drives, on Tuesday said fiscal second-quarter earnings before special items fell 71 percent, though results beat expectations. The Scotts Valley, Calif.-based company earned $30 million, or 14 cents a share, before special items in its fiscal second quarter ended Dec. 31, compared with net income of $104 million, or 42 cents per share, in the year-earlier period. Earnings before charges in the latest quarter exceeded Wall Street's consensus estimate of 8 cents per share, according to investment research firm First Call/Thomson Financial. Quarterly revenue dropped 11 percent to $1.6 billion from $1.8 billion last year, though the company said its share of the original equipment manufacturing market rose. Seagate shares closed on the New York Stock Exchange off 9/16 at 41-7/8. The earnings announcement came after the market closed. ``In what continues to be a challenging business environment ... our performance is attributable to our wide range of product offerings, increased ... market share and the benefits we have begun to realize from' a restructuring, Chief Executive Stephen Luczo said in a statement. After the special items, Seagate reported a net loss of $35 million, or 16 cents a share, for the quarter. One-time costs included a restructuring charge of $23 million and gains related to its investment in Veritas Software Corp. (NasdaqNM:VRTS - news). Seagate, along with other disk drive companies such as Western Digital Corp., Quantum Corp. and others have slashed prices to maintain market share as the price of personal computers continues to plunge. These cheaper PCs use drives with less storage capacity and are not as profitable for the disk drive companies. Both Seagate and Western Digital have eliminated jobs in the last 12 months as a result of slumping profits and sales.

To: Sam who wrote (7767)	1/12/2000 4:30:00 AM
From: Tom Simpson	Respond to of 9256

Hi Sam, No I didn't get a chance to listen in on INVX although I did see the Qtr release and read one account (quite negative) of the CC. On your point, I'm not all that sure that its entirely an HTCH vs INVX issue. There was something distinctly wild about Seagate's behaviour as a suspension customer last year which shows up in KRP's numbers, as well as HTCH's, and further in some of the blurbs Magnecomp put out in Singapore. The trouble with the INVX formulation has been and is that it still requires someone else to make a suspension designed to carry it. In the long run, to beat HTCH at this game, you have to start with making the metal part. If INVX really saw a future in it they would have bought KRP last year instead of ADFLEX...(the banks were dumping their KRP paper for something like 50 cents on the dollar last year and KRP apparently had to shut down production for lack of cash to buy materials). I think INVX has to make it in the broader "flex circuit" business and I'm waiting to see if maybe they can't do that. I'm a complete admirer of what they did in the wire niche while it lasted and how they managed to close down that business without going belly up in the process ala APM. Seagate is sure getting hard to figure out. I just scanned the qtr release and I'm racking my piddly brains trying to imagine how they managed to generate a net charge against profits selling 300+ million of Veritas and 60+ million of Sandisk. And we have guys on this board trying to discount the asset value of those holdings 35% for taxes......hell, since Seagate loses money selling them they should be able to go back and recover prior years taxes by selling more, no? Where is Lawrence Kam when you need him! I also noted that revenue was essentially flat sequentially so there wasn't a whole lot to be immediately enthusiastic about there either. And don't you just love these "one time charges"? What they need to do is establish another permanent line on the quarterly P&L, just below "Interest Expense", called "One Time Charges Expense" :o) All in all, looks to me like my general "floundering" forecast still holds, MXTR notwithstanding. Best Regards......Tom