Seagate profits from Thai flooding

Luczo's luck


Seagate made huge profits of $1.1 billion on revenue of $4.4 billion in its third fiscal 2012 quarter, following a very successful second quarter.

The company shipped a record 61 million hard disk drives in the quarter; a 29 per cent increase over the second quarter and 25 per cent higher than a year ago. It is still benefitting from its operations being relatively unaffected by the October 2011 Thai flood disaster and it's creaming profits. If we look at a chart of net income as a percentage of revenues over the past few quarters we can see the profit jump this quarter in perspective.

SEagate profit percentage

Profits as a percentage of Seagate revenues

Revenues have shot up as well, with a chart again showing the trend over the past few quarters. Third quarter revenue was 37.5 per cent higher than the $3.2 billion in the second quarter, and 63 per cent higher than a year ago. Gross margin was 37 per cent.

Seagate financials to Q3 fy2012

Seagate quarterly revenue and profits for fiscal 2010-2012

Chairman and CEO Steve Luczo said; "Seagate delivered strong performance this quarter by concentrating our efforts toward supporting our customers as the recovery of the hard drive industry continues to progress.”

Yes indeed; Seagate helped its customers by shipping drives and it helped itself as well. People might consider Seagate is profiting from the Thai flood disaster somewhat enthusiastically, thinking that customers couldn't go elsewhere, WD being supply-constrained.

Luczo added; "Importantly, during this challenging period, Seagate has successfully transitioned its portfolio to industry-leading products across all markets thereby positioning the company for continued leadership through operational excellence.”

I don't know that we can call the past six months a challenging period, not when Seagate's profits were 17.6 per cent of revenue in the second quarter and 25 per cent in the third; with customers willing to pay the prices that seems a pretty benign environment for a business.

Seagate issued a commentary about the disk drive market this quarter;

- The Total Addressable Market (TAM) for enterprise disk drives was up 25 per cent over the year-ago quarter and Seagate shipped 7.4 million enterprise drives
- The desktop and mobile drive TAM was down 9 per cent year-over-year and Seagate shipped 43.8 million of these drives.
- The consumer electronics (CE) and retail disk drive TAM was down 25 per cent year-over-year and Seagate shipped 9.5 million of these drives; 6.8 million CE and 2.7 million Seagate-branded drives through the retail channel.

The company boasted it shipped over 1,000 disk drives per employee and was building 10 disk drives a second at the end of the quarter. It expects to be at targeted capacity levels by the quarter after this one, suggesting that next quarter could see storming results as well, making for a terrific full year.

Since Luczo ejected CEO Bill Watkins in January 2009 and took over the reins himself, Seagate has gradually, and now triumphantly recovered. It pleases shareholders with share repurchases, dividend payments, a better areal density showing across the product line and the hybrid drive idea. Luczo's obviously enjoying himself and shareholders will not want him to give up the CEO's job.

Over the full 2012 fiscal year Seagate may well be the unit shipment and revenue leader in the industry, a prospect which seemed highly unlikely three quarters or so ago, when WD was riding high.

Not to be at all dismissive of the horrendous effects suffered by the Thai people as a result of the floods, but in naked business terms the Thai flood disaster has turned into Luczo's luck. ®


Other stories you might like

  • India reveals home-grown server that won't worry the leading edge

    And a National Blockchain Strategy that calls for gov to host BaaS

    India's government has revealed a home-grown server design that is unlikely to threaten the pacesetters of high tech, but (it hopes) will attract domestic buyers and manufacturers and help to kickstart the nation's hardware industry.

    The "Rudra" design is a two-socket server that can run Intel's Cascade Lake Xeons. The machines are offered in 1U or 2U form factors, each at half-width. A pair of GPUs can be equipped, as can DDR4 RAM.

    Cascade Lake emerged in 2019 and has since been superseded by the Ice Lake architecture launched in April 2021. Indian authorities know Rudra is off the pace, and said a new design capable of supporting four GPUs is already in the works with a reveal planned for June 2022.

    Continue reading
  • Prisons transcribe private phone calls with inmates using speech-to-text AI

    Plus: A drug designed by machine learning algorithms to treat liver disease reaches human clinical trials and more

    In brief Prisons around the US are installing AI speech-to-text models to automatically transcribe conversations with inmates during their phone calls.

    A series of contracts and emails from eight different states revealed how Verus, an AI application developed by LEO Technologies and based on a speech-to-text system offered by Amazon, was used to eavesdrop on prisoners’ phone calls.

    In a sales pitch, LEO’s CEO James Sexton told officials working for a jail in Cook County, Illinois, that one of its customers in Calhoun County, Alabama, uses the software to protect prisons from getting sued, according to an investigation by the Thomson Reuters Foundation.

    Continue reading
  • Battlefield 2042: Please don't be the death knell of the franchise, please don't be the death knell of the franchise

    Another terrible launch, but DICE is already working on improvements

    The RPG Greetings, traveller, and welcome back to The Register Plays Games, our monthly gaming column. Since the last edition on New World, we hit level cap and the "endgame". Around this time, item duping exploits became rife and every attempt Amazon Games made to fix it just broke something else. The post-level 60 "watermark" system for gear drops is also infuriating and tedious, but not something we were able to address in the column. So bear these things in mind if you were ever tempted. On that note, it's time to look at another newly released shit show – Battlefield 2042.

    I wanted to love Battlefield 2042, I really did. After the bum note of the first-person shooter (FPS) franchise's return to Second World War theatres with Battlefield V (2018), I stupidly assumed the next entry from EA-owned Swedish developer DICE would be a return to form. I was wrong.

    The multiplayer military FPS market is dominated by two forces: Activision's Call of Duty (COD) series and EA's Battlefield. Fans of each franchise are loyal to the point of zealotry with little crossover between player bases. Here's where I stand: COD jumped the shark with Modern Warfare 2 in 2009. It's flip-flopped from WW2 to present-day combat and back again, tried sci-fi, and even the Battle Royale trend with the free-to-play Call of Duty: Warzone (2020), which has been thoroughly ruined by hackers and developer inaction.

    Continue reading

Biting the hand that feeds IT © 1998–2021