* Q3 adj EPS $2.64 vs estimate of $2.11
* Boosted by higher margins following Thai floods
* Production returning to normal, however
* Q3 revenue up 63 pct to $4.45 bln
By Himank Sharma
April 17 Higher hard drive prices boosted
Seagate Technology Plc's third quarter earnings, but the
electronic storage device maker expects margins to fall as
production levels return to normal following floods in Thailand.
Seagate and rival Western Digital Corp's output was
hit by last year's floods in Thailand, a major producer of
electronic components, though limited supply of hard disk drives
(HDD) increased prices, helping Seagate's earnings beat analyst
The company said it expects its gross margins to come in
above 34.5 percent during the April-June quarter, under the
so-called non-GAAP method of accounting, down from 37 percent in
the third quarter.
"Our supply chain probably rebounded the quickest (after the
floods) and we were able to deliver ... higher capacity drives
to our customers. That's the biggest reason why the margins were
sustained at a higher level," Seagate Chief Financial Officer
Pat O'Malley said in a conference call with reporters.
Increasing enterprise demand for storage has helped
companies like Seagate and Western digital, who together command
almost 90 percent of the HDD market.
In the third quarter, Seagate reported net earnings of $1.15
billion, or $2.48 per share, compared with $93 million, or 21
cents a share, last year.
Excluding factors that could increase volatility, it earned
$2.64, above the $2.11 profit expected by analysts, according to
Thomson Reuters I/B/E/S.
The company now expects total industry-wide hard drive
shipments for the fourth quarter to grow to 160 million units
and hit pre-flood levels by the end of the year.
Seagate itself shipped 61 million drives in the third
quarter - retaining the 43 percent market share it commands.
The company posted a 63 percent increase in third-quarter
revenue to $4.45 billion. Seagate expects it to grow to at least
$5 billion in the current quarter, it said on the call.
Seagate shares rose slightly to $28.91 in aftermarket trade.
They closed at $27.89 on Tuesday on the Nasdaq.