Seagate second quarter earnings shine; Outlook raised on strong demand

Seagate Technology's fiscal second quarter results blew away expectations as it shipped a record number of disk drives.

Seagate Technology's fiscal second quarter results blew away expectations as it shipped a record number of disk drives.

The company reported earnings of $533 million, or $1.03 a share, on revenue of $3.03 billion. Gross margins were 30.5 percent.

Wall Street was expecting earnings of 62 cents a share on revenue of $2.85 billion. Seagate's results were even more impressive when compared to a year ago. In the second quarter a year ago, Seagate reported a net loss of $2.8 billion on revenue of $2.27 billion.

Seagate said that demand is shaping up well. For the quarter ending Jan. 1, Seagate shipped 4.94 million disk drives.

The outlook is also stronger than expected. On a conference call, Seagate executives raised guidance. The company said that its third quarter revenue will be between $2.9 billion and $3.1 billion with earnings of 88 cents a share to 92 cents a share.

Wall Street was looking for earnings of 56 cents a share on revenue of $2.72 billion. Seagate also added that its 2010 targets are now too low, but didn't offer specifics.

Here's a look at the moving parts behind the Seagate results. In a nutshell, Seagate's enterprise, desktop and mobile storage products all showed strong sequential unit improvements.