Seagate on Tuesday provided positive proof of the recovery in IT spending by reporting a huge growth in fiscal fourth quarter and fiscal year 2010 revenue and earnings over the same period of last year.
But despite record operating results for the quarter, Seagate was disappointed that economic and market pricing factors held the company back from even better results.
Seagate reported revenue of $2.7 billion for its fiscal fourth quarter, which ended July 2. That is up 13 percent over the $2.4 billion the company reported for the fourth quarter of 2009.
The company earned $379 million, or 79 cents per share, during the fourth quarter, which was a significant improvement from the loss of $83 million, or 17 cents per share, it reported during the same period as last year.
For all of fiscal 2010, Seagate reported revenue of $11.4 billion, up 16 percent over the $9.8 billion it reported for fiscal 2009. Earnings for 2010 hit $1.6 billion, or $3.28 per share, up significantly over the loss of $3.1 billion, or $6.40 per share, it reported in 209.
That growth came in large part to the recovery in PC and server spending which resulted in Seagate shipping 46.8 million hard drives in fourth quarter 2010, up 15.3 percent over the 40.6 million drives it shipped during the same period last year. For all of fiscal 2010, Seagate shipped 193.2 million hard drives, up 17.9 percent over 2009.
Despite reporting record shipments, profitability, and operating margin for fiscal 2010, the results were somewhat of a disappointment to Seagate, which in the fourth quarter had been expecting better results, said Steve Luczo, Seagate chairman, president, and CEO, in a statement.
Seagate had been expecting more macro-economic stability as well as pricing that better reflected a balance of supply and demand, Luczo said.
"Industry demand in the fiscal fourth quarter was at the low end of our expectations due primarily to issues emanating from the debt crisis in Europe and slowing consumer spending especially in the U.S. and Europe. The lower unit shipments and unfavorable pricing at some key capacity points impacted Seagate’s ability to deliver revenue and earnings for the quarter within our target range. Despite these factors, Seagate reported the highest operating results for a June quarter in the company's history," he said.
