Seagate Technology Inc. reported net income of $518 million for its fiscal third quarter, compared with a net loss of $275 million in the year-ago quarter on a lift from continuing strong demand for hard disk drives and a sharp jump in gross profit margins.
The world's No. 1 supplier of hard disk drives said shipments of its products increased to record levels in the three months ended April 2, while gross profit margins, which had slipped badly in the year-ago period improved markedly to 29.6 percent from 7.1 percent.
Total hard disk drive shipment for the first nine months of the company's fiscal year rose to 146.5 million units, pushing revenue for the period to $8.74 billion compared with $7.45 billion for the nine months ended April 3, 2009.
Seagate's revenue exceeded analysts' consensus estimate of $3.03 billion for the fiscal third quarter but the company also benefited from its improved operating performance as gross profit margins soared on higher hard disk drive shipments.
With inventories remaining low at customers and distributors, the company sees sales improving for the rest of the fiscal year and throughout 2010, according to Steve Luczo, CEO of the Scotts Valley, Calif.-based company.
"We achieve strong operational and financial results," Luczo said in a statement. "We delivered record shipments while our inventory levels at our OEM and distribution customers remained at nearly all time lows across all geographies and all product offerings."
Market researcher iSuppli Corp. had been expecting strong operational performance for Seagate and the entire hard disk drive market. Seagate, it said, would keep its No. 1 position despite stiff challenge from No. 2 vendor Western Digital Corp., which in the December quarter boosted its market share to 30 percent versus its top rival's 31 percent.
The El Segundo, Calif., firm forecasts total hard disk drive shipment for the seasonally weaker first quarter would decline sequentially 3.1 percent to 159.6 million units from 164.7 million units in the prior quarter but added year-over-year would "have risen dramatically compared to the dismal conditions during the same period in 2009."
iSuppli estimates total hard disk drive shipment for 2010 would jump almost 23 percent to 674.6 million units from 549.5 million in 2009. Total shipment in 2009 fell 2 percent from the preceding year, the research firm said in a