Seagate ups sales outlook, becomes go-to hard drive maker amid shortages

Seagate ups sales outlook, becomes go-to hard drive maker amid shortages

Summary: For the March quarter, Seagate said that it expects to deliver revenue of $3.75 billion. Wall Street was expecting revenue of $3.32 billion.

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TOPICS: Hardware
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Seagate said its sales will be stronger than expected as it is one of the few hard drive makers to navigate the floods in Thailand successfully.

Flooding in Thailand has wreaked havoc on the hard drive supply chain and shortages are likely into 2012. However, Seagate facilities were largely unscathed, but the company said that its "ability to manufacture hard disk drives has been impacted due to external component supply constraints."

Nevertheless, Seagate's outlook is looking strong. Seagate said that it will ship about 43 million units in the December quarter (fiscal second quarter) with revenue of $2.8 billion.

Wall Street was expecting revenue of $2.69 billion.

Seagate also said that its margins would be 150 to 300 basis points ahead of its historical range of 22 percent to 26 percent. Seagate's outlook excludes the acquisition of Samsung's hard drive business.

For the March quarter, Seagate said that it expects to deliver revenue of $3.75 billion excluding Samsung. Wall Street was expecting revenue of $3.32 billion.

Overall, Seagate is poised to gain and appears to be the go-to hard drive manufacturer amid tight supply. Indeed, Seagate on Tuesday launched its second-generation solid state hybrid drive for laptops called the Momentus XT.

Due to the Thailand flooding, Seagate said that hard drive supplies will be "significantly constrained for several quarters." Seagate is expecting industry shipments of 110 million to 120 million units. From there, the industry's ability to manufacture and ship hard drives will improve through 2012.

"While this may alleviate some of the unit demand shortfall, it is expected that some companies will optimize unit shipments by manufacturing lower component count/lower capacity hard disk drives; thereby, only modestly offsetting the growing petabyte shortage," said Seagate in a statement. "Because demand is estimated to significantly exceed supply during this time, pricing is expected to remain stable."

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Topic: Hardware

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4 comments
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  • Seagate is garbage

    And I think a lot of people are catching on. I went into Costco the other day and there was a mountain of unsold Seagates external HDs stacked in the electronics section.

    Let's hope people save a lot of heartache here.
    ScorpioBlue
    • RE: Seagate ups sales outlook, becomes go-to hard drive maker amid shortages

      @ScorpioBlue

      Agreed.... Seagate drives are bad compared to Western Digital drives, to be blunt. They have a much higher chance of 'crash + unable to recover data' than Western Digital drives of the same size.
      Lerianis10
  • A flood of profit

    Given the Thailand flooding has konked out maybe 20% manufacturing ability (and proof that "eggs in one basket" isn't all that bad), the fact prices have gone up far higher than 20% is where these companies are getting their profits from.

    By now I suspect even brick'n'mortar stores have jacked up prices, to cash in as well.

    And I've read enough articles on Seagate external drives not to rely on them. Hitachi and WD seem to to better quality-wise.
    HypnoToad72
    • RE: Seagate ups sales outlook, becomes go-to hard drive maker amid shortages

      @HypnoToad72

      True.... some EXTERNAL drives are now retailing for 3 times what they did. They have gone from 60 dollars to 180 dollars. Something just does not equate here to be blunt, and I will be waiting until the prices go down to buy the new hard drives for my laptops that I was going to purchase.
      Lerianis10