Investors Respond to Seagate's Better Than Expected Quarterly Revenue Estimates

Posted 01/05/2012 at 8:08am | by Paul Lilly

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Seagate Technology, the world's largest maker of hard disk drives (HDDs), provided preliminary financial results for its fiscal second quarter ended December 30, 2011, a quarter which ended a week and a half after closing the acquisition of Samsung's HDD business. The results were better than anticipated and Wall Street investors took notice.

According to Bloomberg, Seagate stock rose by as much as 7.9 percent in late trading yesterday, the direct result of reporting revenue figures that beat out expectations.

"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 CEO and chairman. "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."

Seagate said it shipped about 47 million disk drives during its fiscal second quarter of 2012, a number which includes approximately 700,000 Samsung drives. While these are preliminary figures, Seagate said it expects to report revenue of $3.1 billion to $3.2 billion. Analysts were 'only' expecting $2.79 billion in revenue, Bloomberg reports.