January 31, 2012 / 11:26 PM / 8 years ago

Seagate Technology Q2 beats Street on margins

An employee of Seagate Technology is enlarged by a magnifying glass as she concentrates on assembling hard disk drives in a "clean room" at one of their Singapore plants May 5. REUTERS/Luis D'Orey

(Reuters) - Hard drive maker Seagate Technology’s posted better-than-expected quarterly earnings on strong margins, and followed rival Western Digital Corp in signaling a recovery from the floods in Thailand.

Last year’s flooding in Thailand, the country’s worst in decades, disrupted production at the world’s No. 2 exporter of hard drives as factories and industrial estates were inundated.

On January 23, Western Digital — worst hit of the two from the floods — reported better-than-expected quarterly results and forecast a strong current quarter.

Seagate shipped 47 million hard drives, compared with 28.5 million units shipped by Western Digital for the October-December quarter.

For the quarter, the company earned $563 million, or $1.28 a share. Excluding items, Seagate earned $1.32 a share, topping the $1.08 a share estimated by analysts, according to Thomson Reuters I/B/E/S.

Revenue rose 17.5 percent to $3.2 billion, compared to analysts’ average expectation of $3.15 billion.

The company posted gross margins of 31.6 percent, up from 19.5 percent from a year ago.

Shares of Seagate were up 6 pct in trading after the bell. They closed at $21.14 on the Nasdaq on Tuesday. Western Digital shares closed at $36.35 on the New York Stock Exchange.

Reporting by Himank Sharma and Abhiram Nandakumar in Bangalore; Editing by Sriraj Kalluvila

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