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Technology Stocks : Seagate Technology - Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: Duker who wrote (790)	4/12/1999 2:05:00 PM
From: Duker	Respond to of 1989

Most U.S. Disk-Drive Makers To Show EPS Growth For 1Q By Christopher Grimes NEW YORK (Dow Jones)--Although the PC market didn't perform as well as some had hoped in the March quarter, three of the four U.S. disk-drive makers are expected to report greatly improved profits for the period. Only one independent U.S. disk-drive maker, Western Digital Corp. (WDC), is still smarting from last year's miserable slump. The other three, Seagate Technology Inc. (SEG), Quantum Corp. (QNTM) and Maxtor Corp. (MXTR) are expected to show healthy earnings growth for the first quarter. The disk-drive industry was roiled last year as an industrywide glut hurt prices. But the excess inventory has been coming down steadily for three quarters, analysts said. "Everybody did a good job of producing close to (actual) demand" in the first quarter, said James Poyner, an analyst at CIBC Oppenheimer Corp. "We are miles ahead of where we were a year ago. A year ago, (disk drives) were being sold at negative gross margins." At the beginning of the year, some market researchers thought the PC market would overcome its usual first-quarter softness. This wisdom held that companies would spend more at the beginning of 1999 to become compliant with the year-2000 problem. That would offset the post-Christmas hangover that usually strangles the market in the first quarter, the thinking went. But this scenario turned out to be too optimistic. Indeed, top PC maker Compaq Computer Corp. (CPQ) issued a market-shaking profit warning Friday, indicating that sales of personal computers were less than expected. Seagate was somewhat shielded from the weakness in the PC business because of healthy demand for disk drives used in large computer servers, Poyner said. "The server market held up OK," he said. The analyst expects Seagate to have earned 44 cents a share on sales of $1.83 billion, compared with a loss of 10 cents a share, excluding special charges and related tax effects, on $1.68 billion in sales a year ago. A First Call consensus estimate puts Seagate's earnings at 46 cents a share for its fiscal third quarter. The bulk of Quantum's profit is expected to come from non-PC sales, too. The company has a prosperous business of selling recording tape, an operation that "rolled along well" in the March period, Poyner said. He estimates Quantum earned 35 cents a share on sales of $1.36 billion, compared with 2 cents a share on sales of $1.29 billion in its fiscal fourth quarter a year ago. A First Call survey put earnings at 33 cents a share. Western Digital is beginning to reverse the problems that led to a dismal 1998. After falling behind on leading-edge technology, the company inked an agreement with International Business Machines Corp. (IBM) that has helped it introduce new drives using GMR heads, a budding industry standard. Western Digital is also bringing down production costs. But the company will likely post losses at least into the first half of 1999, analysts project. Poyner estimates Western Digital lost 67 cents a share on sales of $703 million, compared with a loss of 51 cents a share on sales of $831 million in the fiscal third quarter a year ago. Analysts surveyed by First Call estimates a wider loss of 68 cents. "They're making overall progress," Poyner said. "Their product line is in fine shape. ... We think they've got a decent chance of profitability in the September quarter." The resurgent Maxtor is expected to have gained PC market share in the first quarter, however, boosting its profits in a weak environment. Robert Hanson, an analyst at Merrill Lynch & Co., said Maxtor's unit shipments actually increased slightly in the period, even though PC sales industrywide likely fell about 10%. "That indicates the company is gaining market share," Hanson said. "And not only is it gaining market share, it's doing so in a profitable fashion." The analyst expects Maxtor to have earned 17 cents a share, excluding a 1 cent charge, on sales of $680 million. That compares with earnings of 10 cents a share on sales of $550 million a year ago. Hanson's estimate is in line with the First Call consensus. - Christopher Grimes; 201-938-5253

To: Duker who wrote (790)	4/12/1999 6:21:00 PM
From: Stitch	Read Replies (2) \| Respond to of 1989

Guys; remember Mad Magazine and their "Scenes we would like to see" This one is my version: Compaq President and CEO Eckard Pfeiffer presented the award to Seagate President and CEO Steve Luczo at a ceremony in Houston on April 8, 1999. ''Last year, Compaq ranked Seagate as its number one disc drive supplier. This year, out of several hundred Compaq suppliers, Seagate is one of only three to receive the Supplier Partnership Award. We recognize Seagate as a top performer because they provide us with high-quality, innovative products that meet our standards for performance, reliability and compatibility,'' said Pfeiffer. ''Seagate has made a significant contribution to Compaq's business, supplying disc drives used in our servers for enterprise computing, consumer desktop PCs, and commercial desktop PCs, among them the popular Presario and DeskPro product lines. Further Seagate has proven to be extremely able in managing response to our inventory needs and we expect they will evidence further nimbleness as we move forward together into the new millenium. It has been a thoroughly enjoyable screwing frankly.'' ''Seagate is extremely pleased to be recognized as a key storage technology supplier for Compaq, a leader in the industry,'' said Luczo. ''Compaq is recognized as a leader in providing their customers with time-to-market products and technologies. Clearly, this leadership position reflects Compaq's strategy to align itself with suppliers, like Seagate, whose business model will help them meet their customers' needs. However, if Mr. Pfeiffer is expecting Seagate to accept yet another reschedule of shipments then Seagate will respectfully decline the award and pull up our pants. We know longer wish to be known as the drive company that uses the most preparation H and KY Jelly. Seagate shipped about 4.2 million disc drives to Compaq last year, and it should have been a lot more. Shipments this year are expected to reach nearly 5 million, so this award reflects Seagate's commitment to deliver all the damn products and service that meet Compaq's high standards. This award is a significant achievement for Seagate, and we believe it is evidence of our commitment to align our company ever more closely with our customers but we have reached the end of our threshold for pain'' <GGGG> Best, Stitch