November 3, 2011 / 12:11 PM / 6 years ago

UPDATE 2-Seagate lowers shipments estimate on Thai floods

Nov 3 (Reuters) - Seagate Technology lowered its shipments estimate for the current quarter as floods in Thailand squeeze capacity, but the hard drive maker is benefiting from better pricing as OEMs scramble to secure supply.

Seagate, along with rival Western Digital , has large manufacturing facilities in the Southeast Asian country, which was hit by floods that killed at least 320 people since July and devastated industrialized areas in the center of the country.

Hard drive manufacturers have raised prices by 20-40 percent since.

For the October-December quarter, Seagate expects to ship around 41-45 million hard disk drives (HDDs) -- almost 16 percent lower sequentially at the mid point.

It expects second-quarter gross margin at the high end of its previously forecast range of 22-26 percent, the company said in a filing with the U.S. Securities and Exchange Commission on Thursday.

“As we have already begun to see in the channel, limited availability of HDDs is driving prices higher and pricing is the primary driver of gross margins,” said Deutsche Bank Securities analyst Sherri Scribner.

Last month, Seagate had said it expected to ship 40-50 million units in the December quarter and that its factories were running full capacity. It shipped 51 million drives in the quarter ended September 30.

Analysts have said Western Digital has been hit more by the flooding and will lose market share to Seagate. Seagate’s shipments forecast for the current quarter is almost double Western Digital’s estimate of 22-26 million units.

In the filing, Seagate said it expects total hard disk demand for about 180 million units in the December quarter but expects industry to ship about 110-120 million units.

Seagate shares, which rose as much as 3 percent to $17.71 in morning trading, were trading up 1 percent at $17.04 on Nasdaq.

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