The disk drive maker smashes earnings records after its most successful quarter ever, with earnings up 30 percent over 2005.Seagate Technology, the world's number one revenue producer in the hard disk drive market, announced on Jan. 23 the industry's first $3 billion quarter alongside whopping revenue growth of 30 percent over a year ago.
The Scotts Valley, Calif.-based company also reported GAAP net income of $140 million and diluted earnings per share of $0.23 for the quarter ending Dec. 29, 2006. Included in the $3 billion revenue is approximately $200 million from legacy Maxtor designed products, a company spokesperson said.
Net income and diluted earnings per share includes approximately $76 million of charges directly associated with the acquisition of former competitor Maxtor in May, 2006 for $1.9 billion, and $19 million for the early retirement of the 8 percent notes.
Excluding these charges, non-GAAP net income and diluted earnings per share were $236 million and $0.39.
"These results are driven by the explosive growth in digital content and the resulting growth in demand for storage, as well as by our ability to deliver a broadening suite of products to a growing set of customers," CEO Bill Watkins told a conference call audience.
The solid quarter reflects better-than expected desktop pricing, the successful transition of Maxtor customers to more cost-effective, higher margin Seagate products, and continued operational excellence, Watkins said.
"With the Maxtor integration substantially complete and exciting new products hitting the market in the current quarter, Seagate is on a path to further increase profitability in the traditionally slower back half of the fiscal year," Watkins said.
Click here to read more about how Seagate is building on its Maxtor acquisition.
During the last quarter, Seagate shipped a record 7 million disk drives for consumer electronics applications, increased its shipments into the mobile compute market by 52 percent year-over-year, and continued to solidify its lead in the enterprise and desktop markets.
Additional highlights of the quarter, Watkins said, include the start of OEM qualification of Seagate's 1.8-inch products; the successful launch of the re-branded Seagate and Maxtor external storage products—which included four new Seagate external storage packages—and the expansion of Seagate's services business with the announced acquisition of EVault.
For more details on the earning report, go here.
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