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Seagate Technology’s revenue in the last quarter decreased by 10%
The outgoing week brought the Seagate quarterly reports, which had an ambiguous impact on the stock market. Revenue decreased by 10% compared to the same period last year, but there are reasons for optimism in some market segments, and the company is more willing to return funds to investors than its main competitor.
Image source: Seagate Technology
If Western Digital Corporation suspended the payment of dividends due to the pandemic, then Seagate Technology increased their size by 3%, and at the same time increased the budget for share buybacks from $ 1.2 to $ 4.2 billion. Seagate’s gross revenue fell 10% to $ 2.31 billion year-on-year, below analysts’ expectations. Directly from the sale of hard drives, the company gained $ 2.14 billion in the reporting period, which is also worse than market expectations. After the publication of the quarterly report, Seagate shares fell in price by 5.4%, and Western Digital Corporation, whose shares fell by 2%.
Image source: Seagate Technology
Seagate notes that demand for hard drives for video surveillance systems has grown, in the “cloud” segment the demand is quite stable. In the current half of the year, demand in the corporate sector will begin to recover, according to company representatives. In the fourth calendar quarter, expects to gain from $ 2.35 to $ 2.75 billion. Commercially shipping 20TB Heated Magnetic Recording (HAMR) hard drives will begin in December.
Gross storage capacity of all drives released in the quarter reached 114.4 exabytes, slightly below the previous quarter. The average size of one drive also decreased from 4.5 to 4.4 TB, but in annual comparison it has grown significantly from the level of 2.9 TB. The number of supplied hard drives continues to decline – over the year it decreased from 33.8 to 26 million units. This is natural, since the concentration of high-capacity drives used in server systems of various levels is growing. Their share of revenue in the last quarter reached 63%, classic applications of hard drives provided only 37% of Seagate’s revenue.