Seagate records $381m Q3 net income

Growing demand for storage will continue Seagate's revenue momentum, the company's CEO has said.
Written by Corinne Reichert, Contributor

Seagate has reported net income of $381 million, or 63 cents per share, on revenue of $2.8 billion for the third quarter of the financial year.

This was down slightly from last quarter's $2.9 billion in revenue, but up from the $2.67 billion announced this time last year by the storage provider.

"Seagate achieved our second consecutive quarter of year-over-year revenue growth and exceeded our financial performance expectations for the March quarter, through solid execution and strong demand for our mass storage products," Seagate CEO Dave Mosley said.

"Looking ahead, the growing data age demand on storage, combined with consistent investment in our leading storage technology platforms and efficient operational capabilities, will continue to drive economic value for customers."

So far for the year, Seagate has recorded $8.349 billion in revenue, compared to $8.365 billion recorded for the first nine months of last year.

Non-GAAP net income for the quarter to March 30 was $424 million, and $1.46 per share.

The third quarter saw Seagate bring in $558 million in cash flow from operations, and $489 million in free cash flow. It spent $254 million on product development, with total operating expenses of $2.4 billion; of this, $11 million was spent on restructuring and "other" net expenses.

Seagate had cut 500 jobs in December after revealing that its September quarterly revenue fell by $165 million due to "price erosion partially offset by an increase in exabytes shipped", with the company then closing its plant in Suzhou, China, and laying off 2,000 employees there in January.

However, Seagate joined the consortium purchasing Toshiba's memory division at the end of last year, at the time saying it is set to provide $1.25 billion in funding to the group, expecting to sign a long-term supply agreement with Toshiba Memory as a result.

The deal would be positive for its earnings, Seagate said in December.

During the most recent quarter, Seagate announced a new high-density enclosure to be powered by its latest data protection-focused operating system to improve performance, reliability, and security.

The 5U84, unveiled at CES 2018 in January, provides 1PB of storage capacity per unit and occupies just five datacentre rack units. It can stack up to between 8PB and 10PB per rack, with up to 84 3.5-inch SAS hard disk drives or solid state drives per enclosure.

"This version [has] data protection, and a couple of unique things about it: It's pretty dense, so you get about a petabyte per drawer, and I can stack up a bunch of drawers behind each other," Seagate told ZDNet at CES.

"We've initiated a couple of new technology features; one is a new version of the operating system, and the way it stores the data it allows for very fast access, and then if a device fails, the time it takes to rebuild information that was on the failed device onto other devices is very fast.

"If we rebuild faster, we reduce the exposure window, and the performance in the meantime is very strong to people requiring access to the data. So it's a new version of our OS on this high-density enclosure."

It hosts 84 drive bays that function with 8TB, 10TB, and 12TB drives, and has the expansion capability of up to 336 drives.

The new OS also has multi-core functionality, enabling several cores to share workloads while specific processing tasks are distributed to individual cores.

Dual 12Gb SAS I/O modules provide redundancy to increase reliability, while a dual controller configuration supports multiple chassis. Performance is around 600K IOPS at 1ms latency for 2U24 AFA, allowing "near instantaneous" data access, Seagate said.

Seagate also used CES 2018 to announce its new mobile data storage solutions, as well as the joint launch of Joy Drive with Chinese online retail giant JD.com.

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