Seagate's first quarter 2018 revenues sank 7 per cent year-on-year to $2.6bn, but the drive biz expects growth and is convinced its heat-assisted magnetic recording (HAMR) tech will help that.
GAAP net income was $181m, up 8.4 per cent on last year's $167m.
New CEO Dave Mosley's statement spoke of "solid execution and market demand" while delivering "record levels of exabyte shipments" and "sequential growth in revenue and profit".
He reckons: "Seagate is in a strong position to grow its businesses, improve profitability and continue with its shareholder-return objectives."
The company, we're told, shipped 70.3EB of capacity, averaging 1.9TB/drive.
HDD revenues were $2.39bn, compared to $2.6bn a year ago. Enterprise systems (arrays), flash and other revenues were $242m, 17 per cent growth from $208m a year ago, also 30 per cent sequential growth from the previous quarter's $186m. In the prior quarter HDD revenues were $2.22bn so there was sequential growth in that category as well.
What about WDC'S rejection of HAMR, Seagate's next-generation disk technology, in favour of MAMR?
In the earnings call, Mosley declared: "We continue to make progress towards the introduction of our heat-assisted magnetic recording, or HAMR, technology portfolio, which is expected to be shipping in volume in 2019... We believe that HAMR technology opens up a rich design space for high capacity and great value, and we've been communicating that with customers for some months now."
Seagate is participating in the Bain consortium bid for the Toshiba Memory Business. CFO Dave Morton referred to this, saying: "We expect to enter into a long-term NAND supply agreement with Toshiba Memory, and that will provide continuity of raw NAND for our extending product portfolio... This agreement has the opportunity to increase the potential for meaningful future revenue growth from Seagate's NAND storage portfolio."
That will be a welcome outcome to this rather desultory affair. Morton also mentioned the disposal of Clusterstore arrays to Cray. "We divested the majority of our high-performance computing assets, which will result in a cost saving of approximately 20 million a year and impact revenues by approximately 50 million per year in our non-HDD revenue."
Mosley talked about shrinking the product variations in the flash drive business. "I think our portfolio is a little too buried, actually, right now, too many interfaces and different solutions for our customers. I think we're going to have to make sure we pick and choose exactly which ones that we want to scale."
Morton expects good growth in 10 and 12TB enterprise disk shipments this quarter. In the desktop area he revealed Seagate had 2TB platters, saying: "Our 2TB per platter, 3.5-inch platform continues to ramp for desktop markets, providing a great value for customers needing 2TB, 4TB and 8TB capacity points."
For the next quarter, Mosley said: "We expect to achieve revenues up approximately 3 per cent to 5 per cent sequentially." That would be $2.7bn to $2.76bn, both down on the year-ago $2.8bn. Seagate generates lots of cash and makes massive amounts of disk drives but its business is shrinking and needs something to restart growth. And there is only one option there, surely? Flash. ®