Santa Cruz Sentinel
SCOTTS VALLEY — Although the disk drive market is picking up, Scotts Valley’s Seagate Technology reported a steep drop in revenues and net income for the December quarter.
Second fiscal quarter net income for Seagate was $150 million, or 31 cents diluted earnings per share, compared to $533 million, or $1.03 diluted earnings per share, the company reported Wednesday. Revenues dropped from about $3.03 billion a year ago in the December quarter to $2.72 billion.
October and November were fairly strong months for Seagate but the market slowed in early December, primarily in the Asia Pacific region. Enterprise sales were up but mobile drives were down 12 percent year-over-year and desktop drives were down 8 percent year-over-year. Drives for consumer electronic applications and Seagate branded retail products experienced an 18 percent and 24 percent jump from a year ago.
It is still too soon to see when and if consumer demand will pick up this year, said Steve Luczo, chief executive officer. On a conference call with analysts, Luczo said it was a function of the overall economic environment. The corporate PC market and the enterprise markets are picking up and may accelerate.
“It’s just hard to make a call here in January what 2011 will look like given the dynamics at the macro level that are still present in the world,” Luczo said.
The company has been consolidating its Silicon Valley offices in preparation to move its administrative offices from
Scotts Valley to Sunnyvale. The short-term effect has been to increase to 800 the number of employees working in Scotts Valley. Last year that number had dropped to about 600 at mid-year.
The company recorded a $7 million restructuring expense in the December quarter primarily related to the planned closure of its Ang Mo Kio manufacturing operations in Singapore.
At a Glance
WHAT: Designs, manufactures and markets hard disk drives for electronic information storing in desktop and laptop computers, consumer electronics and data centers.
HEADQUARTERS: Dublin, Ireland
EMPLOYEES: About 53,000 worldwide, about 800 of whom work in the Scotts Valley administrative offices. The company is moving its administrative U.S. headquarters to Cupertino.
STOCK: Seagate shares trading on the Nasdaq as STX were down 45 cents on Wednesday to close at $14.13. In the last year, shares have traded between $9.84 and $21.58.
FINANCIALS: Second fiscal quarter net income was $150 million, or 31 cents diluted earnings per share, on revenue of $2.72 billion compared to $533 million, or $1.03 diluted earnings per share, on revenue of $3.03 billion a year ago.
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