Seagate Hits Paydirt As Sales, Earnings Rise

During the quarter, which ended September 28, Seagate shipped about 47 million hard drives, up about 21 percent compared to shipments in the same quarter of 2006.

That led to revenue in the quarter of $3.3 billion, up 18 percent compared to the $2.8 billion the company reported a year ago and 57 percent over the revenue it reported two years ago.

Seagate reported income of $355 million, or 67 cents per share, well over the 19 million, or 3 cents per share, it earned last year at this time. Two years ago, the company reported income of $272 million, or 57 cents per share.

The income numbers included charges of $30 million this quarter related to its acquisition of rival Maxtor in May of 2006 and its acquisition in December of on-line backup service provider EVault, compared to charges of $82 million last year related to the Maxtor acquisition.

"Our strong performance in the quarter reflects favorable industry conditions as well as the competitive strength of Seagate's unique platform and commitment to innovation," said Bill Watkins, Seagate chief executive officer, in a prepared statement. "The first fiscal quarter has historically been a strong one for Seagate, and this year, we benefited from unit demand greater than expected. We believe we are well positioned to continue driving year-over-year revenue growth, and these record quarterly results demonstrate the effectiveness of Seagate's business model."

Going forward, Seagate expects revenue of between $3.4 billion and $3.5 billion in the current quarter, compared to revenue of $3.0 billion in the same period last year. The company also expects income of between 66 cents and 70 cents per share, compared to 23 cents per share last year.

Seagate on Tuesday also declared a quarterly dividend of 10 cents per share to be paid on or before November 16. It has also authorized the purchase of about $725 million of its shares, in addition to the 10.3 million shares it repurchased during the first quarter.