Seagate results beat estimates on higher cloud demand
(Reuters) - Hard disk drive maker Seagate Technology Plc (STX.O) reported better-than-expected quarterly results on higher sales of its internet storage devices, and said it expects demand and pricing in the business to rise in the second half.
Shares of the company rose more than 5 percent in extended trade.
"The cloud continues to build out...we are going to see a fairly dramatic acceleration exiting this year and going into the next calendar year...," Chief Executive Steve Luczo said on a conference call with analysts.
"We think there's going to be some pretty tight supply situations in the back half of the year."
Seagate and rival Western Digital Corp (WDC.O) are tapping into the growing demand for products that help customers store data in the cloud and reducing their dependence on personal computer hard drives as consumers increasingly shift to smartphones and tablets.
More than 10 percent of the 55 million hard drives the company shipped in the quarter were to cloud customers, accounting for about 20 percent of revenue, Chief Financial Officer Patrick O'Malley told Reuters.
Seagate forecast current-quarter revenue between $3.3 billion and $3.45 billion, largely above analysts' expectations of $3.35 billion.
Western Digital last week forecast current-quarter revenue largely above analysts' expectations on higher demand for internet storage.
Seagate's net income fell to $416 million, or $1.13 per share in the third quarter, from $1.15 billion, or $2.48 per share, a year earlier.
Profit in the year-ago quarter was boosted by higher hard drive prices as supply was recovering from floods in Thailand, a major producer of electronic components.
Excluding items, the company earned $1.26 per share.
Revenue fell about 21 percent to $3.53 billion.
Analysts on average expected earnings of $1.15 per share on revenue of $3.37 billion, according to Thomson Reuters I/B/E/S.
Seagate's shares closed at $36.94 on the Nasdaq on Wednesday. They have risen 17 percent this year while the broader S&P 500 Computer Storage and Peripherals sub-index .SPLRCTKPR has been largely flat over the same period.
(Reporting by Sruthi Ramakrishnan in Bangalore; Editing by Rodney Joyce and Sriraj Kalluvila)
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