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Seagate net quintuples on laptops

Posted by inet - 2005-10-19

Seagate Technology, the largest U.S. maker of hard-disk drives, on Tuesday said that quarterly profit quintupled amid growing demand for notebook computers and consumer electronics such as Apple Computer Inc.'s iPod.
Seagate shares rose 1.6 percent in after-hours trade. The company missed analysts' revenue forecasts, but one analyst said its gross profit margin was better than expected.

"That shows you that their profitability is still intact," said analyst Shaw Wu of American Technology Research in San Francisco.

Net income for the fiscal first quarter ended September 30 rose to $272 million, or 54 cents per share, from $54 million, or 11 cents per share, in the year-earlier period, the company based in Scotts Valley, California said in a statement.

Revenue rose to $2.09 billion from $1.56 billion. Analysts on average forecast revenue of $2.19 billion, according to Reuters Estimates.

Seagate has been profiting from booming sales of digital music players such as Apple's iPod and growing demand for set-top boxes in homes. Such devices have helped revive an industry that slumped as prices fell amid excess supply.

"Healthy demand across all markets continues, with the most robust growth coming from the notebook and consumer electronics markets," Chief Executive Bill Watkins said in the statement.

The company said it expects fiscal second quarter revenue of $2.1 billion to $2.2 billion and earnings per share of 48 cents to 52 cents, excluding expenses for non-cash stock-based pay. On a net basis, earnings per share should be 44 cents to 48 cents, Seagate said.

Analysts were expecting earnings per share of 55 cents before one-time items in the second quarter, according to Reuters Estimates. They forecast revenue of $2.28 billion.

Seagate shares trade at 7.6 times fiscal 2006 estimated earnings, a discount to competitor Western Digital Corp.'s 9.9 multiple and Maxtor Corp.'s 15.3.

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