Seagate Technology plc (STX) said Tuesday after the markets closed that its third quarter profit rose sharply from last year, as revenue surged and margins improved significantly due to strong demand for hard drives amid recovery following the Thailand floods. The company's quarterly earnings per share, excluding items, also breezed past Wall Street estimates.
The hard-drive industry was severely affected by the heavy floods in Thailand in early October. The situation has been steadily improving since mid-December.
In a supplemental commentary posted on its Website, Seagate said the availability of client products has improved with the notebook market almost fully recovered while desktop market is expected to be constrained through the fall.
The company said revenue and gross margin were higher sequentially due to increased capacity in a supply-constrained environment, combined with its operational ability to continue to ship units at an increasing acreage capacity per drive with improving yields.
Seagate shipped 61 million units in the third quarter, up 29% sequentially and up 25% year-over-year.
"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," said Steve Luczo, Chairman, President and CEO.
For the third quarter ended March 30, 2012, the Dublin, Ireland-based company reported net income of $1.15 billion or $2.48 per share, compared to $93 million or $0.21 per share for the year-ago quarter.
Excluding items, adjusted net income for the latest quarter was $1.22 billion or $2.64 per share.
On average, 21 analysts polled by Thomson Reuters expected the company to earn $2.11 per share for the third quarter. Analysts' estimates typically exclude special items.
Gross margin for the quarter improved significantly to 37% from 19% a year earlier.
Revenue for the third quarter jumped 65% to $4.45 billion from $2.70 billion in the same quarter last year. Nineteen analysts had a consensus revenue estimate of $4.38 billion for the third quarter.
The company also said its Board of Directors has approved a quarterly cash dividend of $0.25 per share, payable on May 17 to shareholders of record on May 2.
Seagate closed its acquisition of the hard disk drive business of South Korea's Samsung Electronics Co., Ltd in December.
Rival Western Digital Corp. (WDC) is scheduled to report third quarter financial results on April 26. Analysts currently expect the company to earn $1.55 per share on revenue of $2.38 billion for the quarter.
Seagate shares, which have traded in a range of $9.05 to $29.00 over the past year, closed Tuesday's regular trading session at $27.89, down 61 cents or 2.16%, but gained 92 cents or 3.30% in after hours trading.
by RTT Staff Writer
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